PPS Trading System by Curtis Arnold

[MRC & Co]

Hi guys,

Have any of you guys read PPS (Pattern Probability System) Trading System by Curtis Arnold?

I gather the book will simply be relating patterns to a trading plan which is easy enough to do alone. Looking for price targets and support, resistance for entries and exits.

However, I believe it also looks into the "more reliable" patterns, which would be interesting in itself.

Anyone read this, is it worth it and any comments?

Reading "Mastering the Trade" currently, but looking to add this one to my pile if its worthwhile.

Cheers

 

[tech/a]

Re: PPS Trading System

Its pretty well all Radge does.
I'm sure he has a twist or two but it does form the basis of much of his work.

But as you well know its all about application.

 

[MRC & Co]

Re: PPS Trading System

I don't quiet get the post Tech.

Radge uses EW and a form of VSA right? Using support/resistance/price targets as stops, exits etc.

The main reason I am looking into this book is to check which of all the standard price patterns (H&S, double tops/bottoms, pennants, flags, wedges, triangles etc) are the most reliable, with vague probabilities if possible (along with reliability once taking recent trend activity and direction into account for each of the patterns of which this applies, i.e. breakouts from descending trianges following a down or uptrend and their respective probabilities). As I dont want to devote a lifetime studying such probabilities through observation myself. Surely someone must have compiled these statistics over a historical study and printed them at some point.....Im hoping this book may detail at least some of the above.

Any help Wayne?

Along with some other random insights usually contained within great books.

 

[tech/a]

Re: PPS Trading System

I don't quiet get the post Tech.

Which part of

Its pretty well all Radge does.

Didnt you understand?

 

[Sean K]

Re: PPS Trading System

I can't see how discussing Radge specifically in relation to Arnold's book is relevant at all. What's the point?

 

[dutchie]

Re: PPS Trading System

G'day MRC & Co

Have a look at:

Encyclopedia of Chart Patterns
SECOND EDITION
Thomas N. Bulkowski

Cheers

dutchie

 

[tech/a]

Re: PPS Trading System

I can't see how discussing Radge specifically in relation to Arnold's book is relevant at all. What's the point?

This was the original question

Anyone read this, is it worth it and any comments?

Radge is a Professional Trader,maybe I'm wrong but I'm of the opinion he is respected as such.

I know for a fact that the basis of much of his trading is around PPS.
So he's obviously read Arnold.
He's obviously successfully applying it.
He obviously thinks its worth it.

Its pretty well all Radge does.

How you come to the conclusion that the above is a discussion about Radge I cant fathom.

Perhaps a comment like a professional trader I know--would have had more impact???
Get over this Radge thing---he's real--has posted here and believes PPS is powerful.
Where MRC and others go with that is their business.

 

[Trembling Hand]

Re: PPS Trading System

As I dont want to devote a lifetime studying such probabilities through observation myself.

Why not? Its the journey that counts not the destination. :


But as dutchie has said Encyclopedia of Chart Patterns is the book. IMO

 

[Sean K]

Re: PPS Trading System

Get over this Radge thing---he's real--has posted here and believes PPS is powerful.

Yes, lets. How about talking about the topic and the book mentioned.

 

[RichKid]

Re: PPS Trading System

Hi guys

Ok, let's try and discuss the book (published in 1995) and its contents. Also, google the author's name for completeness. He got into trouble over some trading system he'd promoted but that doesn't mean that his ideas aren't worth considering.

I've read the book and it's a great book imo, although I haven't studied it as closely as I would like. I say that mainly because it has some excellent money management/position sizing ideas. The key is his integration of those ideas with the patterns he trades. They mesh very well. As I see it, he uses tight stops and high risk/reward ratios in strongly trending markets to capture fast, explosive moves.

Arnold has done some research into pattern reliability and risk/reward in certain markets, this is explained in the book. I also like his introduction to trading markets and risk management in general. I suppose we'll have to do the same for the markets we trade- he describes markets which he thinks are more liquid and transparent. He probably finds that his system, like most systems I presume, work more effectively in such environments. The use of small patterns (ie those occurring over relatively short time frames- see his criteria) to enter large trends is one of the key concepts. I also like the book because it has exercises that you can use to develop your pattern recognition skills. He writes in a clear style and doesn't try to make it more complex than it is.

Tech, you might liked to expand on the position sizing aspects of the book, or maybe the trend following side of it as I gather you have some experience in this area?

Bulkowski has an excellent site at http://thepatternsite.com , he concentrates more on traditional (larger) chart pattern stats whereas Arnold delves into a handful of tiny patterns. I think Radge calls these 'micro' patterns, I understand that he rates the book highly and found inspiration in Arnold's work. We can all adopt and fine tune the aspects of Arnold's thinking which appeal to us. Note that he has specific criteria for his system. It's based on discretion (judging patterns) so it is flexible.

I'm keen to hear from others who are familiar with his work or have opposing views.

 

[tech/a]

Tech, you might liked to expand on the position sizing aspects of the book, or maybe the trend following side of it as I gather you have some experience in this area?

Zero actually.
Its not something I use in my trading.

 

[RichKid]

Zero actually.
Its not something I use in my trading.

I thought you'd used the micro patterns in some of your discretionary speccy trades based on what you'd observed yourself and also learned from Radge about risk/reward. Radge, in turn, I presume, studied the PPS patterns and mm via Arnold. Traders building on the work of other traders. My mistake then? hmmmm, apologies.

PS. fwiw Radge does an excellent job of explaining Arnold's work but there is no substitute for reading it yourself, it's very easy to understand.

 

[Nick Radge]

MRC,
I read PPS in 1994, spend over 100 hours validating it and started trading it in 1995. In 1998 I created Reefcap which managed $12 mill based on what I learnt from that book. In 2000 I started with stocks and continue to do so today. In fact since turning off my trend following models in November it constitutes 90% of my trading.

As RichKid and TH have stated, you need to read it and then make it your own. There are no short cuts. I have made numerous changes but the concepts remain the same. Its like a golf coach. He can teach the about swing planes, weight transfer and alignment but then you need to do the work on the range.

Take a look at the Pacific Brands (PBG) chart which was a short yesterday - straight out of that book.

 

[MRC & Co]

Thanks for the replies guys.

Some excellent stuff here. I think I will get the Arnold book and the Bulkowski book. However, why does he have a free website with chart pattern probabilities if he already has a book for sale on the same topic?

Another question, does the book delve into EW patterns a bit? Not simply traditional chart patterns (i.e. H&S, triangles, double bottoms etc?).

Nick, I have no doubt I need to make it my own. Definately no short cuts. However, I thought you used EW and volume? Not so much traditional/standard patterns (haven't signed upto your site yet as I am so busy reading my pile of books, but mark my words I will once I get through my books). Also, with PBG, you mean broke out of a rectangle/trend channel?

I will have to order these two books now.

Cheers

 

[Pronto]

Re Nick's comments. That's good enough for me. I have just ordered the book off Amazon...

 

[RichKid]

Thanks for the replies guys.

Some excellent stuff here. I think I will get the Arnold book and the Bulkowski book. However, why does he have a free website with chart pattern probabilities if he already has a book for sale on the same topic?

Another question, does the book delve into EW patterns a bit? Not simply traditional chart patterns (i.e. H&S, triangles, double bottoms etc?).

Nick, I have no doubt I need to make it my own. Definately no short cuts. However, I thought you used EW and volume? Not so much traditional/standard patterns (haven't signed upto your site yet as I am so busy reading my pile of books, but mark my words I will once I get through my books). Also, with PBG, you mean broke out of a rectangle/trend channel?

I will have to order these two books now.

Cheers

Hi MRC
fyi there's a great thread here on ASF on Nick's book 'Adaptive Analysis' which discusses some of the topics you mention above. This is a link to the book at ASF's bookshop, you can also find the Bulkowski books here: http://www.moneybags.com.au/default.asp?d=0&t=1&id=5017&c=0&a=74

 

[MRC & Co]

Thanks RichKid, will check it out.

Great help!

 

[RichKid]

Thanks RichKid, will check it out.

Great help!

No problemo! Good luck with the research MRC.

Feel free to post in the thread I mentioned above, as it's more on topic in that thread, Nick has replied many times in there. If the queries are about PPS then this thread is the one to post in.

<edit- fwiw, it looks like PPS will be celebrating its 20th anniversary next year>

 

[MRC & Co]

Will do. Thanks.

Just one question, why does Bulkowski have a free website with chart pattern probabilities if he already has a book for sale on the same topic?

Is there a difference between the book and his website? Or simply that the book is more in-depth?

 

[nomore4s]

Also, with PBG, you mean broke out of a rectangle/trend channel?

I would be guessing Nick is referring to the micro triangle it broke out of yesterday. Not 100% sure though as I haven't read the book.