AbleTrend

John Wang (Hayward, CA) is co-founder, chairman, and CEO of AbleSys. He co-founded AbleSys Corp. in 1994, and created the Spyglass Trading system in 1992, ASCTrend indicators in 1995, and developed the eASCTrend trading system in 2000. AbleTrend 7.0 was launched in 2000. Dr. Wang holds a B.S. in chemical physics from the University of Sciences and Technologies of China (USTC), an MS in quantum chemistry from Zhongshan University, and a Ph.D. in major physical chemistry from University of California Santa Cruz where he was awarded a Regents Fellowship. His research has been published in top scientific journals including Chemical Physics Letter and the Journal of Physical Chemistry, among others. He was a senior and chief scientist at TeloSense Corp. Dr. Wang began trading commodities in 1990 and is an active trader today, registered as a CTA (Commodity Trading Advisor. Dr. Wang's extensive backgrounds in both trading and natural science make him uniquely qualified to create and test computerized trading systems.Grace Wang (Hayward, CA) is vice president of AbleSys and received an MA in sports psychology in 1987 from California State University Sacremento, and an MA in physical education and gymnastics from Shanghai Institute of Physical Education in 1981. Grace became a CTA in 1995 and has been a frequent panel speaker at financial trade shows since 1999.

• Foreword xiPreface xiiiWhat You Will Find in the Book xvWhat You Will Find on the Web Site xviDisclaimer xviiAs You Begin xviiAcknowledgments xixCHAPTER 1 The Search for a Universal Market Law: The Rise of Able Trend 1Complete Chaos or Hidden Order? 1When My Interest in Trading Began 5A Scientific Antidote to Arbitrary Market Predictions 6First Steps: Becoming an EasyLanguage System Developer 7The Trend: Foe or Friend? 7The Fundamental Approach 8The Dream of a Universal Early-Trend Indicator 9Could the Laws of Natural Sciences Also Govern the Financial Markets? 10The Birth of AbleTrend 10CHAPTER 2 Advances in Market Trend Analysis 13What Is a Trend? 14The Setup of a Trend 16Maturity of a Trend 18Drawing Trendlines 24Support and Resistance 29The Market Defines Support and Resistance 30How Common Methods Define Support/Resistance Levels 30How AbleTrend Defines Support and Resistance Levels 32AbleTrend Indicators 37Other Trend-Following Indicators 40Market Indications 46Three Rules for Following Trends 49The Golden Region of Entry: The Sweet Spot 50Time, Price, Forecasts, Predictions, and Targets 54Cycles and Waves 57Summary 59CHAPTER 3 Four Elements of Trading Success 61Profitable Trading Systems and Methods 62Adequate Capitalization 67Money Management Strategy 70Discipline or a Winning Trading Psychology 80Conclusion 85CHAPTER 4 Essential Philosophy of Trend Trading 87Wisdom of the Tao 87Trading Is a Business 98Only Trend Following Works 100Don’t Trade Against the Market 105Which Market Is the Most Tradable and Why? 107Why Voting Systems Do Not Work 110Why $500 or 5 Percent Stops Do Not Work 110Why the Winning Rate Is Not Important 111Why You Cannot Pick a Top or Bottom 112How to Let Profits Run 113How to Cut Losses Short 113Go the Opposite Way of the Majority 115Trade Only the Risk Capital that You Can Afford to Lose 118If You Want to Win, Think About Loss 118Place Yourself beyond the Possibility of Defeat 119Trading Is the Most Difficult Thing in the World 120Conclusion 121CHAPTER 5 The Applications 123What Is the “Winning Framework” for a Trading System? 123STM Method—Buy on Blue and Sell on Red 128Evaluate a Trading System: Back-Testing 134Four Important Issues for Parameter Settings 140AbleTrend2 Stops 144The Sweet Spot—Golden Region of Entry 147Finding the Character of a Particular Market 150Trend Time Frames 151Avoid Choppy Markets 154Breakout or Retracement 162Day Trading versus Swing Trading 166In Conclusion: The Five F’s of Designing a Trading System 166CHAPTER 6 Examples of Trend Analysis 169Stocks 169Commodities 178The E-Minis 189Forex 199Bonds 205Conclusion 210CHAPTER 7 Advanced AbleTrend Tools 211Virtual Paper Trading (VPT) 211Historical Forward Testing 213AutoScan 216The Percent Charts 218The Guidance Charts 219Stock Search Engine—Stock Picks 220Visual or Chart Trading 222Automated Trading Orders 224Options Trading 224Spread Trading 226Portfolio Trading 227Summary 237APPENDIX A Interviews with AbleTrend Users 239John Meyer 239Bob Seifert 242Harvey Saff 244Gerry Wollert 245Mike Weingart 246Alex Kuan 247Remco Eenink 249Chris Anthony 251Jim Kane 253David Fawkes 254APPENDIX B Quick Reference for STM 257STM Trading Method 257References 261About the Authors 263Index 265