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RealTraders:
Highly Recommended: Advanced Trading Strategies by Larry Connors
It is not often that I write book reviews. Then again it is not often that I
read anything that I like as much as Advanced Trading Strategies by Larry
Connors.
Here's why:
Over the years, I've read tons of books on trading. Only a small percentage
made any contribution to my ability to make money trading. The problem is
that all too often, the authors themselves get in the way of the content by
trying to make the book an artsy documentary that you'd see on the PBS.
Frankly, I'm tired of hearing about the "mysterious market order" and all
the pseudoscientific mumbo jumbo. JUST TELL ME HOW TO MAKE MONEY, YOU
IMBECILE!!!
This is what Connors succeeds in doing. He tells you how he makes money
using a collection of trading strategies in a recipe format. Some are
discretionary. Some are mechanical. Everything is useful. And it's easy
reading. Connors knows the value of being concise, factual, and
quantitative. No pyramids of Gaza or spaceships.
Let me give you a peak at how practical this stuff is: Just the other day, I
was on the phone with one of our customers. Towards the end of the
conversation, he asked me--"hey, have you read the new Larry Connors book."
I told him that I had it sitting on my desk. He told me that he'd been doing
very well using a system recipe described in Chapter 25 called "Gipsons." I
looked up the chapter and found that the description of the system was only
3 pages long. The rest of the chapter was a bunch of examples. This system
could be grasped by most traders in five minutes. Ask yourself, isn't that
the way a trading book should be? Basically, if you're a trader who monitors
volatility, you've no doubt noticed that markets fluctuate between low
volatility and high volatility. For traders, high volatility is usually
where the profits are, particularly if you're a short term trader. That's
because the moves coming out of periods of low volatility are typically
explosive in nature. If you're an options trader, you enjoy seeing the cheap
premiums that occur during periods of low volatility.
Gipsons is an approach that identifies a directional bias coming out of a
period of low volatility. Connors' recipe is very simple. I'm not going to
get into specifics, but I'm sure you'll see what I mean. Employing his
perennial favorite indicator ADX, he finds a stock that is trending
strongly. Then he looks for historical volatility to drop under a certain
level. When it does, it means that an explosive resumption of the major
trend can happen at any time. He waits for the trend to resume. When it
does, he goes in with a tight stop. That's it. Gipsons is fun and easy and
I'm currently on the look out for these setups myself in the market.
That's only one of a over a couple dozen well-tested systems and strategies
contained in Connors' new book. For my money, it's better than his work in
Street Smarts which he co-authored with Linda Raschke.
Definitely worth a look.
Eddie Kwong
realtrader since 1976
P.S. Once again--neither I or Kasanjian Research receives any remuneration
for this review. We just like this book.
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