Before we get started, if you are looking for a mechanical trading system, give this book a pass.
The author presents four very useful tools for trading stocks, commodities, or currencies. These are: two time-frame momentum indicators, Elliott waves, Fibonacci with price, and Fibonacci with time. You can use these four tools as a discretionary trading system, but the Fibonacci discussion is especially valuable in and of itself. The author has been around 20 years providing trading advice - an indication of some quality.
I appreciate that the author isn't trying to hard sell his software and newsletter. You can apply the ideas in the book without buying anything more from the author! That is an honest touch that is appreciated. Still the author sells a software package that make things slightly easier, I would imagine. UPDATE: Many people comment negatively that the book is just a sales pitch for the software. Since the book discloses all the four tools, I think such a statement is untrue. However, some of the tool will require you to print out the charts and do manual calculations if you don't have his software.
The style of the text can be somewhat annoying at times; it is repetitive and has too many comments about not-so-good advisors out there somewhere. (No need for the author to point this out unless he wants to name the offenders.) It would have been good if the author told the reader how this book compares to his earlier book Dynamic Trading: Dynamic Concepts in Time, Price & Pattern Analysis With Practical Strategies for Traders & Investors. My take is that the current book introduces the two time-frame momentum and streamlines the other information on Elliott and Fibonacci, but it would have been useful to get this information from the author. Is the previous book superceded in his mind or does it still have value?
All positive reviewers (13 of them at the time of writing) have only reviewed this book and nothing else. Clearly the author has a fan club. Irrespective, I can really this book. I am not part of the fan club and I try to give out as many one star and five star reviews.
do not think that this book will make you a more successful trader by simply following a set of hard-and-fast rules. It will give you some interesting ideas to kick around in your head and try out on your own trades. If you want to save yourself the trouble of reading the book, here are its key points, in a nutshell: 1.) Graph momentum below your stock charts and know what the Oversold/Overbought lines mean and where they are. 2.) Learn about Fibonacci Retracements and learn how to set them on your main stock chart, superimposed over your graph lines. 3.) Know how to set stops that will only drain your account up to 3% if the market heads the wrong way after your entrance point. If you master those points and tangential topics that go with them pertaining to money management and trading mindset, you will have the book pretty much down pat and be able to do your own prognosticating. Remember, though, anyone, and I mean ANYONE, can do after-the-fact "prognosticating" with historical charts in hand, and then fiddle around until a "system" is found that can fit that data. Once Miner starts getting into the charts and logic of his system, anyone who has a taken probability and statistics in school will see that a little fun is afoot. It simply is "mathematical justification voodoo" at its best. To give Miner his due, he freely admits that you will never win all of the time. He even says you will most likely lose a great deal, and gives the stats on what percentage of traders go bust after just their first six months (variously 70-95%!). I was struck, though, about half-way through the book, that all of Miner's complicated systems analysis charts, and such, exist to help sell his software and trading services, although he comes off, in so many words, like that is not the case. I don't believe it, for one minute. He mentions "proprietary" data analysis in his software that his company uses, and you can bet the farm that he is baiting you to pop big bucks for that. Another thing, the charts in this book are terrible, as it is tough to clearly make out, in many cases, what Miner is trying to illustrate, and they are discussed on pages other than the ones on which they appear. Talk about frustrating! In the end, this book is similar to many others. It is written by a clever guy who has taken to heart the old, familiar words of PT Barnum, which you should know, as I'm not telling you, here. You can read it, get frustrated, figure, "Oh what the heck. I'll just buy his software and let it make me millions!" BUZZZZZZ! Wrong thought. What the software will do, according to those who have bought it and discussed it online, is to relieve you of your hard-earned money, and little else. It does not, according to the same folks, give you definite entrance and exit points, at all. In closing, ponder this, as with all other folks who write these types of books, if Miner was the trading Guru he seems to come off as in this book, his protests to the contrary, why would he need to do anything other than sit at home, in his mansion, and make trades all day? With him being the absolute master of his own system, he should make billions, literally. He doesn't, though, from trading, and neither will you. UPDATE: I have been experimenting with Miner's system and, by pure serendipity, made this discovery: If you are looking at 1-minute charts on one screen, and 5-minute charts on another, for the same, exact stock, guess what----Momentum may be exactly opposite on the two charts! In other words, the 1-minute chart may show you that a stock is overbought and, thus, ripe for a short position, while on the 5-minute chart the stock is shown as oversold and, thus, ready for a long position. I understand that this can be spun to make sense if one counters by saying: "Well, it all depends on if you're making one or five minute turnarounds, and considering one-day or five-day charts." Thing is, it just has a bad "feel" to it. To me, it simply is another indication that Miner's system mumbo-jumbo is just that: Complex-sounding permutations applied to very basic trading tools, put together in such a way that you become convinced that you absolutely need his support materials to succeed in trading. Please consider everything I've said in the above and read other reviews on here before you fork over your cash, and/or jump into trading. Good luck! Update 11/15/10: In this book you are advised to not trade when momentum charting clearly indicates highly overbought/oversold trades. FWIW, I have found that selling/buying at precisely those times leads to consistent success. I have had very few losing trades following my own strategy. Of course, find what works for you.
This is a good book as a general reminder but for the more advanced trader it just repeats what a majority of us already know
My summary with some of my own thoughts:
learn the concept of price action and study it for a long time prior to starting trading. Map out your risks and profits point prior to executing. Learn how to read the trading dime, this is the box on your screen that comes with the trading software you have. It shows you the price and on the left side it will show the amount of contracts being sold, and on the right the amount being bought.
I trade e-mini futures primarily sp500. Keep in mind 1min and 5 min chart having different overbought and oversold levels which is something that can be highly advantageous once learnt. If you find your scalping trades on a 1 min chart are not working then try and zoom out your focus to a 5 or 10min chart to play longer trm trends in which the momentums direction is clearer. I try not to use the minute charts because it does not give me clear picture of the sentiment via volatility. Try and use a tick chart in conjunction with a minute chart. Tick charts are useful because each bar or candle represent a certain amount of contracts traded. I use a 1000 tick chart with 5000 tick chart on another screen. The 1000 tick is useful because it gives your entry point while the 5000 provides some context as to where the subtrend your trading is in the overall larger trend. Included with those I follow the 60 min chart t see where we are in the context of the last few days.
Give yourself some practical rules. Don't trade after a lage move, don't trade after a lage move down. Give the market time to consolidate otherwise your not trading but rather guessing the direction of the trade. If it looks like the market is going to breakout after consolidation wait for the market to retest your levels. If your levels hold then go with it. You won't make as much money but your not going for home runs. You want to take the smaller profit and be consistent. Thus you have the opportunity to stay in the game and take advantage of the next trade.
If you missed your entry point then don't try and convince yourself to take it anyway. Stop and reevaluate the next levels because chances are once you missed your entry the trade is done. Learn to move on...there will always be more opportunities.
I use the awesome oscillator as my primary tool. An example of my strategy: sp500 is tring to touch below 1400 again after attempting the day prior but failing. Is the selling pressure stronger/equal/or weaker than the prior attempt. If the momentum is stronger or equal I take the short. The same ideology works for long positions. Keep in mind it sounds simple but you have to take into account the diversion of the 1000, and 5000 tick in conjunction with your minute charts. tick charts and minute charts are very different so keep that in kind. And learn why they are different:the buying and selling diversion on both types of charts will help you with your entry points.
Write down your levels in the morning prior to trading. When you rush your decision making regarding levels you may get over excited in the process and feel pressured to take a trade you normally would not make. This puts you in a precarious position. If you don't trade well due to a bad entry there is a higher likelihood of you making a poor trade come next execution.
When data is released wait until the market absorbs the data. I tend to give it a few minutes. Sometimes it looks as though it's a definite trend but it can reverse before you can blink your eyes. A breakout will usually test itself before it continues so you will have another chance. Feel free to ask me any question.
Product Details :
Hardcover: 288 pages
Publisher: Wiley; 1 edition (October 20, 2008)
Language: English
ISBN-10: 0470181664
ISBN-13: 978-0470181669
Product Dimensions: 7.4 x 1 x 10.3 inches
More Details about High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets 1st edition
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