Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals
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Evidence-Based Technical Analysis examines how you can apply the scientific method, and recently developed statistical tests, to determine the true effectiveness of technical trading signals. Throughout the book, expert David Aronson provides you with comprehensive coverage of this new methodology, which is specifically designed for evaluating the performance of rules/signals that are discovered by data mining…. More >>
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5 Responses to “Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals”
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I can’t believe that this author spent more than 500 pages just to “prove” that his prior long and unsatisfactory experience (or performance or career, or whatever) in trading, etc is completely the fault of the TA indicators, but not any problems on his part (such as smartness or lack of it, etc.) Even harder for me to imagine is that this author has to spend almost half of the volume to “argue” or “prove”, from his “philosopher’s” stands point, that he is such a “savior” of the entire TA industry by bringing his so-called “science” into this “superstitious” community. I can’t believe what I was reading. By the way, I also could hardly understand why the author would not spare readers like myself his philosophy preaching by separating it from his rudimentary arithmetic formulas and statistic101 class notes like presentations into different volumes. That’s just my humble opinion. But in the end I have to congratulate myself for being lucky enough to finish it in time and to return it to the BN store to get a full refund.
It is my strong belief that author in this “book” has proved absolutely NOTHING. I cannot find any merit, scientific or otherwise, in this “book”. I was actually offended by the obscene assault on the civilized society by this author and I had wished he had had placed a warning label to this “book”. The methods or tactics the author has used in writing this “book” are mostly inherited from the attack by the “intelligent design” school against the evolutionist, which attacks the evolutionism as not being a “proven” theory, but never provide any kind of “proof” of their own. The author has spent vast majority of pages attacking the others as individuals, and the TA community as a whole. However, scientifically he is not capable of doing anything, LET ALONE TO PROVE ANYTHING. The author’s only capability is to “argue” and “define” according to his subjective wishes.
Rating: 1 / 5
A well done treatise on the application of the scientific method to the field of TA. Highly recommended unless you would rather believe in fairy-tales
Rating: 5 / 5
The subjects treated in this book are essential to understanding the process of data mining, and if the results of the data mining have any significance.
The book covers a lot of ground, not all of it strictly necessary (for example, theories on market randomness and the philosophy of science), but the core material is indispensable.
Rating: 4 / 5
I’ve had numerous encounters (arguments, discussions, debate or whatever you wish to call it) with the author on this board. It amuses me to observe that it is IMPOSSIBLE for this author to summarize his book in concise and precise words, and the author is so easily “exhausted” (in his own words) when I asked such questions. Before I actually read the book, I had also repeatedly questioned the author what is the relation between his “work” and the prior studies on the subject of statistical aspects on TA indicators. I was more than surprised to see again that this author is so easily “exhausted” on such simple questions as well. I have been really puzzled by such apparent lack of self-confidence on his own book, and his mysterious attitude towards my questions.
Then came the personal attack. I was accused by a “commentator”, who was apparently “summoned” from somewhere in the “west Indy” with a pretended “Teutonic accent”, that I and another reviewer could not even “summon a credible English sentence”, and our “arguments are facile”. I was thus challenged to find out the answers by myself. I have since accepted the author’s challenge, and I have also promised this author a review. Voila, here you have my review.
It turns out that the real situation is much worse than I had thought. Before I actually read this book, I thought it might be just a term paper for a sophomore project. What I found out is that I had grossly overestimated this author: now I honestly do not even believe that it would pass a freshman test. My reasons are the following.
1) It seems to me that the author had intentionally avoided mentioning a systematic study reported in a book that was published two decades ago: “The Encyclopedia of Technical Market Indicators” by Robert W. Colby and Thomas A. Meyers. The first edition of the book was published in 1988. To my knowledge this is the first book that systematically, honestly, objectively and scientifically studied all the known TA indicators up to that date. This is also the book that first discussed in great details and in practical terms the significance and implications of such studies. My point of views is that the study made by the above-mentioned two authors and their results are still much clearer than, and far more superior to this half-cooked stuff by this author, in theoretical as well as practical sense. NOW COME THE QUESTIONS: WHY THE AUTHOR DELIBERATELY IGNORED TO MENTION THIS MOST IMPORTANT AND RELEVANT FACT? WHY HE IS SO EASILY EXHAUSTED ON ANY QUESTIONS CONCERNING ANY RELATIONS OF HIS BOOK TO PREVIOUS STUDIES ON THE STATISTICAL PROPERTIES OF THE TA INDICATORS?
2) It is common practice (with the exception of fictions, or some textbooks) that any responsible authors would provide an abstract to summarize the work, or would include such a summary in the introduction, or preface (or wherever the readers can read first). This practice would be beneficial both to the authors and the potential readers, if the author really wishes to help the readers to make an easy decision. We have an exception here: You have to read through the entire book to search for your answer (whatever could it be). More troublesome is that it seems to me that more often than not this author does not even know what he is talking about, and he would be so easily diverted aside by his own obsession with showing off his big “ego” and his urges for settling some old personal “scores”. This kind of characteristic traits makes a crystal clear distinction of his book with the objective and scientific attitude and approach shown in “The Encyclopedia” mentioned above. I am still having a difficult time to give a summary on this book, and I believe that only the author can provide one (but I really doubt it). For the test results as reported by the author alone, it is highly inadequate to be considered a serious statistical study for the current TA indicators or testing methods. Such results should have been anticipated for anyone who is familiar with the work of Robert W. Colby and Thomas A. Meyers published two decades ago. In fact the results reported in this book are so weak, and so incomplete that you cannot draw any definitive conclusion on any thing. So much so for what is on this author’s mind in regard to the “methodological debate.”
3) The “introduction” of the book read like a manifesto of some sort by this author. Due the deficiencies we observed above, it is proper to conclude that this manifesto started with a declaration of intention of playing a “Heroic March of Don Quixote”, and ended up with an incoherent, ear-piercing and high-pitched high-decibels noise of some sort.
Last, but not least, I would like to tell the author that his egotistic presentation of his understanding of TA indicators is worse than “facile”, which is such a pity for any person who claims forty some years working experience in the field. Moreover, it is my point of view that this self-proclaimed scientific seeker has no slightest scientific working experience but just like to carry a label.
Rating: 1 / 5
This is the only book out there that challenges the dogma of TA that many new traders fall prey to!. Not only it does that with sound logical arguments but also explains in painstaking detail how to test your rules to make sure that the returns are statistically significant. The author explains in detail the basis for the book and the ideas and how to implement them. Definitely its requires some sort of intensive study and it not for casual trader who is looking for some magic tricks.
Ask yourself are the head and shoulder, the triangle etc etc patterns statistically significant?, Are you trading a pattern or a rule because you heard it works somewhere or did you test to see that it works better than a trade based on coin toss?. In short are you always taking the statistically significant trades?. If you cannot answer this question then you need to read this book.
This book also has detailed references to various papers and articles which you can try to read to get that edge that every trader needs to find for himself. If you are a programmer like me you can implement software to test out your trading strategies!!. In short for system developers based on TA this book is a must read.
Rating: 5 / 5