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Fooled by Technical Analysis: The perils of charting, backtesting and data-mining – Comment section
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C. V.
I don’t believe I’m at par to judge the quality of this work, but I know clarity of mind when I see one, definitely recommended if you are into it.
Luc
I am really impressed with the subscription to your Price Action Lab Blog and avidly reading in the book "Fooled by Technical Analysis" (currently in chapter 5)
Vernon
Your book "Fooled by Technical Analysis is fantastic!
Mauel
… having read your books is one of the most profitable investments of my short life. Thanks
Fernando
Fooled By Technical Analysis is the opposite of most books: it offers far more than the title says. In addition, the book chapters on how not to develop a trading system is something that is not found in books on the subject and a must-read for anyone considering trading rules.
Timo
I just read your book "Fooled by Technical Analysis" for the first time and I have to say that, it was quite an eye opener
Holger
Very nice work, especially Chapter 6.
John R.
This is one of the best books I have read on trading and system development, if not the best. A fresh look at the subject. Now moving to the other book.
Giovanni
Probably the best book about trading I have ever read. Thank you Mr. Harris for sharing your knowledge on this subject.
Fernando A.
hi Mike,
Thanks for publishing your book "Fooled by Technical Analysis". It has been a challenging and fun read. Wanted to ask you 2 questions regarding Chapter 7.
1. On pg 1/7 you state, "In the case of percentage stop-loss, the exit level may not be known in advance and position size determination must be made based on certain assumptions". Is that because you cannot know the open price of the next bar, and the s/l trigger price will depend on that unknown open price?
2. On pg 3/7 you state, "If the price is lower than 200, then the maximum number of shares allowed should be used for the position size in place of the number calculated by Equation 7.5". Shouldn't that be the other way around, when the price falls below use (7.5) but above then the max allowed?
Thanks in advance,
Fer
Michael Harris
Hello Fernando,
1. Exactly. When a percent of entry price is used the stop-loss amount is known only after the trade is executed. Usually differences are small but there is always uncertainty, for example in case of large gaps.
2. If P = 200 and capital is 100K then 500 shares can be bought. If price is 100, then 1,000 shares can be bought but risk will be 4%, not 2%. You are correct, this is an error, it should read "If the price is higher than 200…". Thanks for catching it.
Best.
Michael
Tom B.
This is the best trading book I have ever read. It changed the way I look at technical analysis and trading. I agree with comment by nick diran above: "It's an eyes opener!
Thank you Michael Harris for this!
Michael Harris
Thank you Tom.
Alex B.
…reading your book has been a great breath of fresh air, complete gold in there…
Johannes L.
Hello Michael,
I'm an avid reader of your blog and of your books. Especially the last one Fooled by Technical Analysis was an eye opener for me.
Tadas Talaikis
Excellent book, it sums up every fragment I've gathered through experience. And hate it (or myself) because I've lost so much time swimming in the sea of nonsense, and developing biased stuff. Thank you for sharing your wisdom, Michael.
BTW, I have created book page on Goodreads: https://www.goodreads.com/book/show/26876460-fooled-by-technical-analysis
Michael Harris
Hi Tadas. Thank you for your good words and for creating the book page on Goodreads.
Joshua G
Mr Harris
Your book is an eye opener for me. I really appreciate you spending the
time to write the book.
nick diran
Seriously for 50 USD this was one of best book I have ever read. Whatever the format! The chapter 6 and 7 probably made me save 50k$ alone.
First this blog is excellent and for free. Second this book made think seriously about my backtesting process and my risk exposure in a very important way. the book is clear and full of example that anybody will understand. if it's only to support Michael to continue to publish more work like this that i would subcribe again!
Here is the work of someone with 30 years of experience who is brutally honest and will make you think in more than one way about your 'superb quantitative algorithm'.
It's an eyes opener!
Antonio
Hello Mr. Harris,
I have never thought before that by using my backtesting program a lot I would be limiting my chances for a good system. Now that I think about it it makes sense. Thank you so much for helping us traders to find our ways.
Your book is incredible.
Antonio
Michael Harris
Hello Antonio,
It is best to reuse data to test a new idea only if it is unique enough and promising. Most traders are trapped in a vicious circle of endless backtesting of similar ideas.
Michael
Norman
Michael, this is an excellent book. I'm really enjoying it and agree with you about chart analysis and TA indicators. Do you plan to offer an e-book?
Norman
Michael Harris
Hello Norman,
There will be no e-book, only the online version. Thank you for your good words.
Michael