Trading Book Reviews

Book Review: George Lindsay and the Art of Technical Analysis

[easyazon-link asin=”0132699060″][/easyazon-link]I was recently given the opportunity to pick up a copy of [easyazon-link asin=”0132699060″]George Lindsay and the Art of Technical Analysis[/easyazon-link], written by Ed Carlson. I was attracted to it by the reported quality of George Lindsay’s market analysis, though he’s not someone with which I was familiar prior to reading the book. He was a bit before my time in terms of when I started following the markets. 🙂

This book comprises a couple of primary parts. The first is a brief biography of Lindsay. It’s not particularly lengthy, however, as apparently Lindsay wasn’t someone well known on a personal level. He is known for his stock market newsletter writing back during the 1960s and 1970s. His market calls were apparently so good that key market followers of the time praised him very highly.

After the bio, the book gets into the featured technique of Lindsay’s – the Three Peaks and a Domed House chart formation. The author lays that out over four chapters. Although Lindsay didn’t really leave behind any singular technical manual type of explanation of the pattern, the author (Carlson) does do a pretty good job of teasing out the specifics from his writings on the subject.

The next part of the book covers The Lindsay Timing Model. This the application of “counts” to project market turning points. We’re not talking cycles here. It’s not about consistently repeating patterns, but rather taking a recently completed chart pattern and using it as the basis for a projection of a trend move timing.

The final section extends the counting element and brings in intervals and cycles. It also provides some case study evidence.

Now, it should be noted that the patterns and counts and whatnot discussed in the book are not short-term in nature. They are mainly based on daily bars and can take quite a while to unfold. For example, Three Peaks and a Domed House is a daily chart pattern which takes months to play out, though there are elements of it which could be traded along the way in slightly shorter-term ways.

Overall, I found the Lindsay work interesting. Readers familiar with Elliott Wave analysis will see some of those elements in the patterns described in the book. I would have liked to have seen more in the way of real world examples, particularly more modern ones. For someone interested in studying price action, however, this book could provide quite a bit of inspiration for research.

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Trading Book Reviews

Book Review: Trend Commandments

[easyazon-link asin=”0132695243″][/easyazon-link]I’ll admit to not being 100% sure how to describe [easyazon-link asin=”0132695243″]Trend Commandments[/easyazon-link] by Michael Covel. I’ll give it my best shot, though.

First of all, I’ll say it’s a pretty fast, easy read. The book is structured in a kind of series of articles or essays fashion. There are lots of them, and each “chapter” is only a couple pages. I read them straight through from front to back, but I see no reason why they couldn’t be read out of order if desired. The page count is about 240 in the print version I have, but it reads much more quickly than that because of its structure.

Like Covel’s earlier book, Trend Following, this is an unabashed endorsement of the trend trading approach. I’ve described that former book as being like a philosophy text which includes the discussion of the subject matter by numerous practitioners. Trend Commandments is also very philosophy oriented, though focuses pretty exclusively on the author’s own views on the subject, views informed by years interacting with the sorts of practitioners featured in the first book.

This is not a practical manual.

That needs to be made very clear. Covel does not describe trend following systems. You won’t find advice on indicators or methods for identifying trends. He does speak on the subjects of risk management, as well as market diversification. In the latter case there is a specific listing of markets that could/should be included in a trend trading strategy. The risk discussion is only really in terms of generalities.

So the bottom line is that if you’re looking for a book that lays out one or more trading systems you’ll want to look elsewhere. This book won’t fulfill that requirement (Covel’s The Complete Turtle is better in that regard, but I’d actually recommend Way of the Turtle as a more practical trend trading manual). If, however, you’d like to understand the mentality which underlies the trend following approach to trading, this is definitely a book worth reading (I’m planning on doing some future blog posts related to ideas brought up in the book). Just be prepared for a very unapologetic criticism of other approaches and mindsets found in the markets and media.

By the way, the “commandments” only really come in at the very end of the book in the form of a long (definitely not just ten) list of quotes from noted traders.

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