Review: Mechanical Trading Systems Book

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Review: Mechanical Trading Systems Book

Post by spancham » Wed Jun 14, 2017 1:45 am

Hi All,
I thought I'd drop a short note about my experience so far since purchasing Earik's Mechanical Trading Systems book 3 1/2 months ago, as many of you may be curious about the book.

For me, it is worth every penny
First of all, it is very expensive -- USD $2000, so I am not telling you to find a way to buy the book if you don't have the money, BUT if you do have the money to spend on it, then it is worth every penny. I am very grateful that this book exists and that it was written.

You will learn a lot but will have to put in the time and effort
MTS offers many ready-done scripts of trading strategies, including Genetic Algorithm and Neural Networks systems, that you will have to manually input into Wave59. However in doing so, you will develop a feel for Wave59's QScript and you understand what the system is doing, you will learn how to back test systems and understand the system report, and how to create your own trading system scripts, setting up the trading rules and buy and sell signals, and to merge multiple trading systems.
:arrow: I don't want you to think that even when you spend your hard earned money that things will just fall into your lap when you receive the book.
For the last 3 1/2 months, everyday after work late into the night and on weekends I have plugged away at working through the book.

The MTS book is like a key to insider secrets on trading techniques
I have never done any trading in the financial markets therefore many concepts I learned from reading the MTS book have been like insider secrets being revealed to me. As an example, you will learn about Position Sizing. Here is an excerpt:
"Position sizing is a way to turn a regular, smooth equity curve into an explosive, exponential one that climbs straight through the roof. If you are interested in eventually making millions of dollars a year off your systems, it's the position sizing aspect of trading that will take you there."
Earik's MTS book offers position sizing scripts that you can use immediately.

You will learn how to build a merged system for yourself
At this point, I have been able to string together a merged system for the E-Mini S&P futures that performs well in back testing over the last 19 years (1998-2017). My merged system consists of four systems -- two systems are from Earik's MTS book (one is a Genetic Algorithm system, another is Momentum based), a third system is one I created by modifying Wave59's PFE indicator, and the fourth is from the WTT Cycles. Plus, it uses the Position Sizing script from the book.

Nervous and Excited and ready to trade the system
I am now ready to start trading my merged system. It 'earns' positive annual returns over the entire back testing period, hopefully this is not because of curve fitting the data.
Here are the back testing results -- This is what happens when you let position sizing run wild. Starting with just $40K in 1998, and allowing the system to trade more and more contracts as the equity in the account grows, it 'earned' $59Billion up to today. Obviously, this is unrealistic because you won't ever be able to trade that many E-Mini contracts. But using position sizing and letting it run is the only way to compare the performance of different systems.
systemrpt.gif (29.63 KiB) Viewed 8988 times
system3.gif (25.88 KiB) Viewed 8988 times

When the number of contracts per trade is capped at 3000, it still earns $530Million:
system2.gif (26.48 KiB) Viewed 8988 times
And it has the nice equity curve that according to the MTS book, you want your trading system to aspire to:
system4.gif (24.55 KiB) Viewed 8988 times

Time to Go Live :o
I am glad that I am finally at this point to take my trading system live. Earik's MTS book also gives you a script to connect to a broker and execute automated trading, which is what I'll look into next.

Future offerings in the bookstore
I hope that Earik and the Wave59 team will continue to offer more mechanical trading systems and position sizing scripts in the bookstore. I'd certainly be up for trying them.

In summary
In summary, as I said before I am grateful Earik sat down and wrote this book and that I got it.


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Location: Mumbai, India

Re: Review: Mechanical Trading Systems Book

Post by rlygangesh » Wed Jun 14, 2017 5:27 am

Hi sir
wishing you a good trading fortune , going live is always wild , draw down result have more % , little tension here, first system shows a W/L ratio less than one, first system also shows that very less profit from short side with compare to long.

what will happens if you play long only?
can you please discuss more about WTT cycle system ?

& system waiting approx 9-10 year to see a decent profit up to 2007-08- , why are you not using option chapter for better result

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Re: Review: Mechanical Trading Systems Book

Post by earik » Wed Jun 14, 2017 4:54 pm

Hi Sheikh,

Glad to hear you are making good use of the book, and thanks for the review. :D Let us know how things progress once you go live with your system...!



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