Title: Beyond Technical Analysis: How to Develop and Implement a Winning Trading System (2nd Edition)

Author: Tushar S. Chande

In “Beyond Technical Analysis,” Tushar Chande shares valuable insights and essential information for those who want to succeed in trading stocks or futures. This updated and expanded second Edition focuses on creating a winning trading system, controlling risks, and managing psychological pressures. The book’s central thesis revolves around developing trading systems that align with individual trading beliefs and profit objectives. Chande offers a stimulating blend of modern techniques, timeless principles, and practical guidelines throughout the book.

Main Thesis and Argument

The core argument of “Beyond Technical Analysis” is that long-term trading success requires a disciplined approach to create a winning trading system, effectively manage risks, and handle the psychological aspects of trading. Chande emphasizes that personal beliefs, values, and objectives must remain central to developing trading systems.

Author’s Support of the Main Thesis

Chande supports his main thesis by breaking the book into three sections:

  1. Trading Systems: This section highlights the importance of developing a comprehensive trading system. Change details the essential components of such systems, including risk management and market selection. He stresses the need to build systems aligning with individual trading beliefs and objectives.
  2. Risk Control: Chande emphasizes that managing risk is critical for long-term trading success. He offers robust risk-control methods, valuable tools, and practical tips. Chande discusses position sizing, position concentration, and risk-adjusted performance measures to help traders optimize their trading system.
  3. Psychological Aspects of Trading: The book delves into the psychological factors influencing traders and their decisions. Chande integrates concepts from sports psychology and presents powerful psychological tools, creating an innovative synthesis of both disciplines.

Throughout the book, Chande provides several case studies and examples to illustrate the concepts and strategies discussed. These case studies enable readers to understand how these ideas can be implemented in real-world trading situations.

Strengths

Some strong points of “Beyond Technical Analysis” include:

  1. Comprehensive coverage of various trading aspects makes it suitable for both beginners and experienced traders. 
  2. A balanced blend of modern techniques and timeless principles allows readers to adapt to evolving market conditions. 
  3. Inclusion of practical examples and case studies to demonstrate real-life applications. 
  4. Focus on the psychological aspects of trading, an often overlooked but crucial part of successful trading.

Weaknesses

A few weaknesses in “Beyond Technical Analysis” are:

  1. Some concepts and techniques may be too advanced for novice traders, making the book less accessible to beginners. 
  2. Chande’s writing style can sometimes be technical and dense, making it difficult for some readers to follow.

Personal Opinion and Criticism

I found “Beyond Technical Analysis” to be an insightful and comprehensive guide to trading systems, risk control, and psychological aspects of trading. Change presents valuable information and practical guidelines for traders at any experience level. However, some concepts and techniques may be challenging for beginners, and his writing style may not be accessible to all readers. Despite these minor limitations, I appreciate the depth and breadth of the book’s coverage.