The Big Trade: Simple Strategies for Maximum Market Returns

162 Pages·2013·3.25 MB·English

by  Peter Pham

Contents
Acknowledgments
Preface
Chapter 1: Breaking with Tradition
Then I Got High
Training Sequence
Technical Difficulties
Reading Is Fundamental
Inductively Coupled Failure
The Big Trade
We’re Getting the Band Back Together
Summary
Chapter 2: The Conditions of Change
Livin’ on the Edge
Closing Time
The Outsiders
Living Day to Day
Sold to the Highest Bidder
Breaking It Down
Finites Move in Infinite Markets
Summary
Chapter 3: Wax On, Wax Off
What Goes Around Comes Around
It’s Always Noon Somewhere
Opening Range Jitters
Objects in Motion
Summary
Chapter 4: As the Market Turns . . .
Subconscious Implications
Elephant Walk
Breakouts versus Reversals
Losing Your Inhibitions
Reversal of Fortune
Traders Do It with Frequency
Rules of Engagement
Turn Around and Make Money
Heading for the Exits
Becoming a Reactionary
Summary
Chapter 5: The Range Is Your Friend
Sideways
Waves of Sentimentality
Where Are They Now?
The Edge of Value
The Great One
Summary
Chapter 6: Closing Arguments
Crossing the Great Stream
Pressing the Issues
The Point of the Journey Is Not to Arrive
Summary
Appendix A: Terms and Definitions
Appendix B: Trading Examples
Appendix C: Spreadsheet Examples
Appendix D: Supporting Data for Nvidia Example in Chapter 4
About the Author
Index

Copyright © 2013 by John Wiley & Sons Singapore Pte. Ltd.
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This book is dedicated to all friends and loved ones as well as those who have
provided me with support and challenged me to continuously improve, not only
as a professional but as a person.
Acknowledgments
I would like to thank everyone who has an interest in the markets and trading, as
you were the inspiration for me to codify my methods and share them with those
who are interested in seeking an alternative trading strategy.
I would also like to thank the team at AlphaVN.com, who have risen to the
challenge of building something of value from very humble beginnings.
Preface
Over four centuries ago, the invention of both the telescope and microscope
brought new focus to a data measurement revolution. The ability to bring far
away objects closer and make tiny objects bigger opened the world and sky up to
new levels of observation. The science of optics fed our curiosity and ignited our
imaginations.
Today our world is awash in data; we are swimming in it. We call this the
Information Age but we could just as easily call it the Data Age. The art of
statistics and the use of Big Data are leading to revolutions in fields as diverse as
the physical sciences, sports, and economics. It doesn’t matter if you’re the
general manager of a hockey club or a process engineer working for a solar cell
manufacturer, data is your work’s lifeblood, and without accurate and precise
data we would not have been able to make the kinds of strides we have. This use
of data is spearheading a decision-making revolution that is changing the very
foundations of our society.
Similar to how the use of optic lenses four centuries ago paved the way for the
Age of Enlightenment, we are living through a leap forward in the types and
quality of observations we can make about our world. No longer are we intuiting
our decisions based on a mix of anecdotal evidence and supposition. We can
make an observation, test its validity, and make decisions based on it. Data is at
the heart of how we conduct business and how prices paid form markets for our
goods.
Over the past decade I’ve had the pleasure to stumble upon this big and small
data phenomenon in my pursuit of understanding capital markets. What I have
discovered is that data-driven discovery is fundamentally changing the way our
lives work, and those who master its manipulation will have an inherent
competitive advantage over their peers. This is especially true in the capital
markets, where quantitative analysis mixed with the brute force of vast amounts
of capital create a very hostile environment for the individual investor. It is my
hope that this book will help level that playing field a little bit for you.
As I said, we live in a world steeped in data. Information comes screaming at
us in waves and it is easy to be overwhelmed by it, become lost in it. Big Data
can and often does overwhelm the smallest actor. But it doesn’t have to.
The bigger they are, the harder they fall. One person with an idea and the will
to implement it in this age of unprecedented access to high-quality information
can disrupt things, and use it to their advantage. Previously, information itself
was the barrier to entry into the markets. Today, the biggest worry for most
established players is not innovating by producing new information but keeping
information under their control and away from you. Think of the music industry
or Apple’s patent litigation against Samsung and you have an idea of where
we’re headed.
Take heart, because inside of each of us is our Big Idea. I believe that.
Everyone has at least one, biding its time and waiting for you to believe in it.
With time, attention, and the proper use of Big Data, we all have the means to
see our Big Idea become real. It’s simple, really, when you stop to think about it.
It is a little thing in a big world, but it is the secret to finding and making The Big
Trade.