Contents

Preface

Acknowledgments

CHAPTER 1 Dispelling Myths and Defining Terms: Mathematical Technical Analysis and Mechanical Trading Systems

Dispelling the Myths: The Inefficient Market and the Hard Road to Profits

Technical Analysis: A Definition

Mechanical Trading Systems: A Definition

Defining the Time frames

Technical Analysis: Why it Works

Types of Technical Indicators: Trend-Following and Mean Reversion

CHAPTER 2 Mathematical Technical Analysis: A Building Block for Mechanical Trading System Development

Types of Technical Indicators

Trend-Following Indicators: Indicator-Driven Triggers

Price-Triggered Trend-Following Indicators: Donchian's Channel Breakout

Mean Reversion Indicator-Driven Triggers: Oscillators

CHAPTER 3 Trend-Following Systems: A Matter of Fortitude

Preliminary Considerations

Two Moving Average Crossover

Ichimoku Two Moving Average Crossover

Three Moving Average Crossover

Ichimoku Three Moving Average Crossover

MACD

DMI

DMI with ADX

Channel Breakout

Bollinger Bands

Some Comparisons

General Rules of Thumb

Cutting the Tails of a System's Distribution

Psychological Profile of a Trend-Following Trader

CHAPTER 4 Mean Reversion Systems: A Matter of Patience

Considerations in Analyzing Intermediate-Term Mean Reversion Trading Systems

Trend-Following Mean Reversion Systems

Nondirectionally Biased Mean Reversion Systems

Psychological Profile of an Intermediate-Term Mean Reversion Trader

CHAPTER 5 Short-Term Systems: A Matter of Quick-Mindedness

Fading the Losing ...

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