Evidence-Based Technical Analysis Book Review

Recommended by		100%
Score		88/100 (1 rating)
Readability		5/5
Length		4/5
Use of Illustrations		4/5
Index and Layout		4/5
Quality of Information		5/5
Title	Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals
Author(s)	David Aronson
Publish Date	Nov-2006
Amazon Rank	286,097
ISBN	0470008741

Review Evidence-Based Technical Analysis

See all books

A must read if you are wondering if your trading system results are statistically significant

Score		88/100
Readability		5/5
Length		4/5
Use of Illustrations		4/5
Index and Layout		4/5
Quality of Information		5/5

The best trading book I read in many years!

Chapter 2 (mostly about psychological flaws) is nothing really new but well written & documented, chapter 3 makes a great job at describing the basics of the scientific method (even though I am an engineer & have had a 25 year career in high-tech R&D, I have to admit I was totally unaware of it), chapter 4 provide a sound statistical basis to test the predictive power of a trading rule/signal/system. Chapters 5 & 6 extend these techniques to data-mining. Chapter 7 reviews the principles & flaws of the Efficient Markets Hypothesis (EMH), then introduces a number of non-random price theories. Finally, chapter 8 describes the systematic testing of over 6,000 signals on the S&P500 daily, of which the "best" one doesn't pass the statistical significance test for data-mining ... so don't look at this book to provide you the holy-grail, because it won't, but it is a great eye-opener.