Synopses & Reviews

Publisher Comments:

Cycles appear everywhere in life, from the world of nature to the world of economics. Market cycles-one of the few measurable market parameters-come and go, but when measured with a fast-reacting algorithm such as Maximum Entropy Spectrum Analysis (MESA), previously unforeseen trading opportunities suddenly become apparent.

In MESA and Trading Market Cycles, Second Edition, MESA pioneer John F. Ehlers returns to reveal more of the inner workings and hidden mechanisms of MESA-the author’s well-known and highly respected computerized trading system-and provides both traders and professional speculators with definitive information on using cyclical analysis to create and execute highly profitable forecasting and trading strategies.

This revised and completely updated resource first validates the existence of market cycles by reviewing the history of cycles and the advances in techniques to measure them. It then profiles the basic characteristics of cycles and fully describes moving averages, momentum functions, and indicators from the cyclical perspective. From here, Ehlers focuses on MESA, explaining how it works, how it compares to the Fast Fourier Transformation (FFT), and how traders can use its high-resolution spectral estimates to consistently pinpoint and exploit market cycles and trends.

MESA and Trading Market Cycles, Second Edition also contains new chapters which provide information that makes MESA a much more powerful tool. Topics within these chapters include:

* The Sinewave Indicator

* The Instantaneous Trendline

* Trading Trend Mode and Cycle Mode

* Making standard indicators adaptive:Commodity Channel Indicator (CCI), Relative Strength Indicator (RSI), and Stochastic Indicator

* Developing highly effective automatic trading systems using MESA-measured cycles

* Stock market systems, along with computer code (EasyLanguage) to implement them

Combining MESA, cycles, and technical analysis, this vital guide shows you-whether you’re trading in the stock, options, or futures markets-how to boost the probability of establishing successful trades and profitably increase your bottom line. MESA and Trading Market Cycles introduces you to a new way of thinking that will not only lead to highly effective new indicators, but will also provide you with insights into market activity that you would never have imagined.

Book News Annotation:

Ehlers (president, MESA software) explains how his Maximum Entropy Spectrum Analysis (MESA) program can be used to analyze market cycles in economics for the purpose of investing. After reviewing the history of cycles, he discusses the solutions to the Drunkard’s Walk problem, which is related to the trend mode and cycle mode of the market. Techniques are presented on how to excise specific cyclic components and minimize lags. The ways MESA interprets these components is then demonstrated.

Annotation c. Book News, Inc. Portland, OR (booknews.com)