Big Trends in Trading: Strategies to Master Major Market Moves

by Price Headley

Book Overview

Arms traders and sophisticated individual investors with the tools they need to play the markets successfully Many traders believe that they must perform at least one trade every day, no matter what. However, as expert Price Headley clearly demonstrates in this groundbreaking book, not only is that assumption false, it can also be dangerous. He shows why focusing too narrowly on the daily ebb and flow of the markets minimizes a trader's chances for...

• Format: Hardcover
• Language: English
• ISBN: 0471412694
• ISBN13: 9780471412694
• Release Date: February 2002
• Publisher: John Wiley & Sons
• Length: 272 Pages
• Weight: 1.10 lbs.
• Dimensions: 0.9" x 6.6" x 8.8"

Customer Reviews

Finally someone else who says day trading doesn't work

The average investor is not made to be a daytrader. There money is not large enough to succeed, and when they use leverage to compensate they compound their problem by overleveraging. Mr. Headley points out all of these issues in his book. This book ... paves the way for a new generation of futures traders and stock traders.The only drawback is this book doesn't discuss the new security futures. Other than that it is a fine primer and reference book for years to come.

Practical Strategies for Building Wealth

Big Trends in Trading really helps you understand what makes the markets tick. Headley gets right to the bottom line, which is helping investors make more money with a better understanding of the best ways to put your money to work. Headley highlights some key indicators that look beyond the news headlines to gauges of investor sentiment and key sentiment indicators that help you see where the markets are heading over different time frames. And in my experience, that can make a big, big difference in your portfolio. What's more, he also offers some very specific ways to spot the best stock opportunities, as well as stock and option strategies designed to help make money in different market conditions. He definitely doesn't "dumb it down" - the material is detailed, with complete information on results from the various trading strategies spelled out.

Top Notch Book on Determining Market's Direction

Price Headley, the founder of BigTrends.com, has shared many of his best market indicators with readers. I've seen Headley speak at a few Investor Expos and he not only knows his stuff, but he presents it clearly without going over the heads of the audience. He has taken the same approach with his book. I found the indicators that he reviews to be very useful in providing insight into them market direction. I have personally used a number of them myself over the years. Not only does Headley provide the indicators, but he also includes the EasyLanguage Code for Tradestation platform users so that they can easily input his indicators on their PCs. Headley could have kept the settings of his indicators proprietary, but he chooses the high rode and shared them with his readers. Now to the review of this book. Chapter 1 focuses on Headley's favorite contrary sentiment indicator -- CBOE Equity Put/Call Ratio. Readings below 0.4 are considered bullish and above 0.8 bearish. He also draws standard Bollinger Bands (BB) on the ratio to add another dimension to determining extreme ratio readings. He also covers the weekly ratio, as well as intra-day readings. Moreover, he explains the Total Put/Call ratio (Equity and Index Options) and how to use it to determine fear or greed in the market. Throughout the chapter Headley shows the performance statistics of each indicator over specific timeframes with complete profit and loss statistics. He uses this approach throughout the book so you can see for yourself, which of the strategies have the most bang for the buck. Chapter 2 covers the fund flows in and out of three Rydex Funds -- Nova, OTC and Ursa. Nova provides 1.5 times the performance of the S & P 500 Index. OTC mirrors the performance of the NASDAQ 100, and URSA is inverse the S & P 500(short fund). Headley obtains the daily funds flow data for each fund directly from Rydex and then plugs the data into a formula : (Nova+OTC)/URSA. He found that the lower this ratio the lower was investor confidence in the market. This is a contrary indicator and a buy signal. The reverse is a sell signal.Chapter 3 introduces the CBOE Volatility Index known as VIX. It is a measure of the expected volatility of stocks based on pricing of the S & P 100 (or OEX) options. VIX is also used as a contrary indicator with high readings bullish (40) and low readings (18) bearish.Chapter 4 focuses on volume indicators. He uses the daily QQQ, NASDAQ Composite and Spyders with their respective volumes. He graphs the prices of these items with BBs on the data to identify overbought and oversold conditions.Chapter 5 covers surveys used to gauge fear and greed in the markets. Headley recommends taking a contrary position to the survey results when they reach extreme readings. Surveys he reviews include the Investors Intelligence Bull and Bear Index, Consensus, Inc., AAII weekly poll, and Market Vane. Performance data using these surveys is also provided.Chapter 6 reviews Headl

Mr. Headley should have a PhD in Trading Psychology.

I loved this book! From the contrarian aspect of going against the crowd in the early chapters to the part I found most invaluable, the "Trading Psychology and Money Management" section at the end the book was very informative. Mr. Headley takes you into the mind of what it means to be a trader and to be successful in the markets. He may be a CFA and a Market Techniciaon MTA, but he should be given a PhD in trading psychology. The last chapter on this is worth twice the price of the book. Of the books I've read on trading in recent years, this one is one of my favorites. I've had the privilege of reading Trading for a Living by Dr. Elder, and Pit Bull by Martin Schwartz, (two of my favorites I'll list) and've now been given a new and fresh angle on trading, while holding true to some of the basic disciplines of what it means to be a trader. I found Mr. Headley's "crowd sentiment" indicators to be impressive, while the last chapter on psychology will be referenced many times over to be sure. Of the tens of books I've read on trading, this one has been given a forceful shove into my top three, which I'm sure I'll read over and over.

A Better Way to Invest and Trade In Volatile Markets

After reading my fair share of investment and trading books, I have to say that this one stands out - Headley offers a lot of practical, detailed ways to trade successfully in various market environments. I'm not the only one who learned since 1999 that simply buying and holding stocks can actually be quite risky - the point of the book is to show the way that bullish and bearish market and sector cycles have accelerated tremendously. As a result, you can either get punished during the rough stretches or take some steps to take advantage of the market's directional moves along the way. Best of all, the book takes some traditional ways of spotting big trends in stocks and updates them with new methods I've never seen before. A couple of areas really stand out: The well-researched explanation of conventional technical and relative strength indicators used by William O'Neil, John Murphy et al. with new tools like Headley's Acceleration Bands and Momentum Divergence signals. These are things I was able to use immediately, thanks to the indicator formulas he provides. I've been able to enter and exit positions profitably overall without being badly affected by big market swings. I think that's the big difference here. Too many other investing guides simply rehash existing knowledge (or advertise someone's service) without helping you be a smarter investor. The book also opened my eyes to several key option strategies to help generate income or protect profits in difficult markets. I recommend this book to anyone who wants to expand their trading knowledge and apply the concepts to real-world trading.