Trading Books: ‘Trading Systems That Work’ By Thomas Stridsman

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Introduction to Trading Systems That Work

“Trading Systems That Work,” authored by Thomas Stridsman and published in 2001 by McGraw-Hill, stands as a cornerstone for traders seeking to integrate systematic approaches into their trading strategies. This book is particularly valuable for both intermediate and advanced traders who are looking to refine their trading systems or develop new ones grounded in data-driven methodologies. Stridsman’s practical and thorough approach to building robust trading systems has made this book a must-read in the trading community. By focusing on the essentials of system creation and testing, Stridsman demystifies the process, making it accessible to traders who are serious about achieving consistent results.

Trading systems that work by thomas stridsman

Thomas Stridsman Background

Thomas Stridsman is a highly respected figure in the trading world, known for his contributions to the development of systematic trading methodologies. With a strong background in trading and finance, Stridsman has authored several influential books and numerous articles that have shaped modern trading practices. His expertise in system development and backtesting has made him a go-to authority for traders looking to enhance their trading strategies. You can learn more about experts like Thomas Stridsman through resources available at Enlightened Stock Trading.

Summary of Trading Systems That Work

“Trading Systems That Work” covers essential topics that every systematic trader must understand to build and refine their trading systems:

  • Understanding System Components: Breaks down the critical elements of a trading system, including entry and exit strategies, risk management, and optimization techniques.
  • System Development: Offers a step-by-step guide on how to develop a trading system from scratch, ensuring that each component is tested and validated.
  • Backtesting and Optimization: Provides comprehensive insights into backtesting systems using historical data and optimizing them to improve performance.
  • Practical Application: Discusses real-world application of trading systems, including case studies and examples to illustrate successful implementation.
  • Risk Management: Emphasizes the importance of robust risk management practices to protect trading capital and enhance system longevity.

The book is structured to take traders through the entire process of system development, from conceptualization to implementation, ensuring that no stone is left unturned.

Key Concepts and Strategies

At the heart of “Trading Systems That Work,” Stridsman introduces traders to the fundamental concepts necessary for building a reliable trading system. The book emphasizes the importance of a systematic approach, where decisions are based on data rather than emotions or gut feelings. One of the key concepts covered is the development of entry and exit rules that are not only clear but also easily testable. Stridsman argues that a good trading system should be simple yet robust, capable of adapting to different market conditions without requiring constant adjustments.

Another crucial lesson is the importance of backtesting. Stridsman stresses that backtesting is not just about finding a profitable system in the past but ensuring that the system can withstand various market conditions and remain profitable in the future. This involves thorough testing across different time frames and market environments, which helps traders build confidence in their systems and avoid costly mistakes.

Practical Applications

Stridsman provides traders with actionable advice on how to apply the concepts discussed in the book to their trading practices. For example, the book includes detailed discussions on position sizing methods that help traders manage risk effectively. Stridsman explains how to use backtesting results to determine the optimal position size for each trade, balancing potential returns with acceptable risk levels.

Additionally, Stridsman offers insights into the automation of trading systems, encouraging traders to use software to execute their systems without the interference of human emotions. This is particularly beneficial for traders who are looking to implement their strategies across multiple markets or who simply want to ensure consistency in their trading.

Powerful Trading Quotes from Trading Systems That Work

"A trading system that cannot be backtested is a trading system that cannot be trusted."

"Consistency in trading comes from discipline, and discipline comes from having a system you believe in."

"The best trading system is not the one that makes the most money but the one you can follow consistently without hesitation."

Personal Insights from Thomas Stridsman

Throughout “Trading Systems That Work,” Stridsman shares personal anecdotes and insights that provide a deeper connection to the material. For instance, he discusses the challenges he faced when transitioning from discretionary trading to a fully systematic approach, highlighting the mental hurdles that many traders encounter. These stories not only make the material more relatable but also serve as motivation for traders who are struggling to trust their systems.

Stridsman also shares his experiences with system failures, emphasizing the importance of continuous learning and adaptation. He explains how these failures led him to refine his approach, ultimately resulting in more robust and reliable trading systems.

Conclusion

“Trading Systems That Work” is an invaluable resource for traders at all levels, offering a blend of theoretical knowledge, practical guidance, and personal insights from one of the industry’s leading experts. Whether you’re a beginner looking to build your first system or an experienced trader seeking to refine your strategies, this book provides the tools and knowledge necessary to succeed. The combination of clear explanations, actionable advice, and real-world examples makes it an essential read for anyone serious about systematic trading.

For those looking to expand their understanding of trading and improve their strategies, this book is a must-read. Buy it now on Amazon.

Other Great Trading Books

There are many great trading books which will help you accelerate your trading career. The following are books that we have reviewed and consider valuable additions to any systematic trader’s library.

Systematic Trading Books

General Trading Books

Risk Management Trading Books

Technical Analysis Trading Books

Fundamental Investing Trading Books

Psychology Trading Books

Amibroker Trading Books

author avatar
Adrian Reid Founder and CEO
Adrian is a full-time private trader based in Australia and also the Founder and Trading Coach at Enlightened Stock Trading, which focuses on educating and supporting traders on their journey to profitable systems trading. Following his successful adoption of systematic trading which generated him hundreds of thousands of dollars a year using just 30 minutes a day to manage his system trading workflow, Adrian made the easy decision to leave his professional work in the corporate world in 2012. Adrian trades long/short across US, Australian and international stock markets and the cryptocurrency markets. His trading systems are now fully automated and have consistently outperformed international share markets with dramatically reduced risk over the past 20+ years. Adrian focuses on building portfolios of profitable, stable and robust long term trading systems to beat market returns with high risk adjusted returns. Adrian teaches traders from all over the world how to get profitable, confident and consistent by trading systematically and backtesting their own trading systems. He helps profitable traders grow and smooth returns by implementing a portfolio of trading systems to make money from different markets and market conditions.
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2 Comments

  1. voiaj on August 13, 2020 at 6:37 pm

    Magnificent site. Plenty of helpful information here.
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    Reply
    • Adrian Reid
      Adrian Reid on August 19, 2020 at 10:29 am

      Thank you for taking the time to read my articles Vioaj – Make sure you check out the free resources and training I have available here: Link

      Reply

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