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>Has anyone read Tom Williams book, "The Undeclared Secrets of the Stock
Market"? Is it worth the books price?
Answers: Yes and No!
Tom Williams also sells (used to sell?) a program called VSA, which stood
for Volume Spread Analysis. I tried it ages ago, when I thought a
mechanical system would be the answer, but he was good enough to give me
back the £1K he charged when it was perfectly plain (to me anyway!) after a
month, that the little green (buy)and red (sell) signals would lead you into
more trouble than money.
The book, as the title states, is based around stocks and shares and the
FTSE. It is heavily baised towards volume and virtually all the examples
are on daily charts, for position players. However the VSA program could
be set to any time frame. Whether it works or not on some commodities, it
is not for day traders and most certainly does not work on the tick volume
of the T-Bonds!
The whole concept is one of reliance on strength or weakness coming into the
market, as shown by volume. There is no doubt that, in the right
circumstance, volume can certainly help to confirm what you are seeing on
the chart, but to base a whole system on it.....!? If the book has not been
up-dated, then I think it is rather old fashioned both as a treatise and in
presentation, but there are some useful bits and pieces of knowledge - the
trouble is, if you are new at the business you might have difficulty
appreciating which bits!
The book is of little value to the day trader, and the computer program
probably dangerous. As for the position player, there must be much, much
more that can be thrown into the pot than the heavy reliance on volume.
But, it has to be said that many of the concepts of how the markets work and
how the strings behind the scenes are pulled, will be interesting, if not
astounding, to the newbie trader; whether phrases like "a high volume
up-bar primes the market bearish" will make you money, I am doubtful... It
seems to me, there are more times when the given circumstance of seeing such
a phenomenum, do not work or would require mammoth amounts of drawdown, to
invalidate the statement. However, that is not to say that volume does not
play an important part in trading, but I cannot see how you can base a
system on it.
Anyway, the so-called secrets - declared or otherwise - that are revealed in
the book are not what I need to know to put bread on the table day after day
after day. That's a fact!
Bill Eykyn
www.t-bondtrader.com
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