Rating: 
Summary: A Real Gem
Review: Price Headley successfully combines his obviously well-tested market analysis and trading theory with practical step-by-step guidelines in this compact, yet amazingly complete trading treatise. There are so many real gems contained in this small book I can only urge beginning and advanced traders alike to grab a copy and read it...several times over. Headley introduces a few unique and intuitively appealing indicators for determining market trends, stock selection and entry-exit techniques, as well as his considerable insights on working with more well-known indcators like the VIX, Rydex and put/call ratios. I was particularly impressed with his work on directional options trading and his superb treatment of the type of money management and psychology that is absolutely critical if one is to develop consistent success at trading. I suspect that even long-term professional traders will find much that is new, or at least refreshing and useful, in these pages and I certainly won't be surprised to see "Big Trends in Trading" join the short list of must read classics in the years to come.
Rating:
Summary: Top Notch Book on Determining Market's Direction
Review: Price Headley, the founder of BigTrends.com, has shared many of his best market indicators with readers. I've seen Headley speak at a few Investor Expos and he not only knows his stuff, but he presents it clearly without going over the heads of the audience. He has taken the same approach with his book. I found the indicators that he reviews to be very useful in providing insight into them market direction. I have personally used a number of them myself over the years. Not only does Headley provide the indicators, but he also includes the EasyLanguage Code for Tradestation platform users so that they can easily input his indicators on their PCs. Headley could have kept the settings of his indicators proprietary, but he chooses the high rode and shared them with his readers. Now to the review of this book. Chapter 1 focuses on Headley's favorite contrary sentiment indicator -- CBOE Equity Put/Call Ratio. Readings below 0.4 are considered bullish and above 0.8 bearish. He also draws standard Bollinger Bands (BB) on the ratio to add another dimension to determining extreme ratio readings. He also covers the weekly ratio, as well as intra-day readings. Moreover, he explains the Total Put/Call ratio (Equity and Index Options) and how to use it to determine fear or greed in the market. Throughout the chapter Headley shows the performance statistics of each indicator over specific timeframes with complete profit and loss statistics. He uses this approach throughout the book so you can see for yourself, which of the strategies have the most bang for the buck. Chapter 2 covers the fund flows in and out of three Rydex Funds -- Nova, OTC and Ursa. Nova provides 1.5 times the performance of the S&P 500 Index. OTC mirrors the performance of the NASDAQ 100, and URSA is inverse the S&P 500
(short fund). Headley obtains the daily funds flow data for each fund directly from Rydex and then plugs the data into a formula : (Nova+OTC)/URSA. He found that the lower this ratio the lower was investor confidence in the market. This is a contrary indicator and a buy signal. The reverse is a sell signal. Chapter 3 introduces the CBOE Volatility Index known as VIX. It is a measure of the expected volatility of stocks based on pricing of the S&P 100 (or OEX) options. VIX is also used as a contrary indicator with high readings bullish (40) and low readings (18) bearish. Chapter 4 focuses on volume indicators. He uses the daily QQQ, NASDAQ Composite and Spyders with their respective volumes. He graphs the prices of these items with BBs on the data to identify overbought and oversold conditions. Chapter 5 covers surveys used to gauge fear and greed in the markets. Headley recommends taking a contrary position to the survey results when they reach extreme readings. Surveys he reviews include the Investors Intelligence Bull and Bear Index, Consensus, Inc., AAII weekly poll, and Market Vane. Performance data using these surveys is also provided. Chapter 6 reviews Headley's favorite classic trend indicators. These include weekly and daily moving averages, MACD, support and resistance, average true range, and ADX. He briefly mentions candlestick charts using one example, and covers a few points on system testing. Chapter 7 introduces the "acceleration band" indicator developed by Headley. He provides an explanation of the logic behind it, the EasyLanguage Code and numerous chart examples. Headley is basically taking the directional movement each day (high-low) and dividing it by the average stock price (high+low divided by 2) to obtain the directional movement of the stock or index. Also included is a discussion of moving average envelopes (similar to BBs) and illustrations of their use. Chapter 8 covers the concept of momentum divergences. Headley uses the MACD indicator to determine his key entry and exit points, then he introduces his unique Momentum Divergence Indicator with chart examples and TradeStation code. He then combines the momentum divergence with moving average envelopes to provide his buy and sell signals. He provides charts of 10 popular stocks and their performance using these indicators. Chapter 9 focuses on the relative strength of stocks to its comparative market index. This has nothing to do with the RSI indicator although they have similar names. Headley recommends using an RS line with 5, 10, 20 and 50-day moving averages. He provides 6 chart examples with this data and a detailed explanation. Chapter 10 and 11 cover the basic principles of trading options. Headley provides four simple option-trading rules. He then explains option strategies in different market conditions. The book's last chapter (40 pages) reviews the key tenets of trading psychology and money management. Topics include: building a customized trading plan, psychological issues to be aware of, and effective money management rules. Headley provides not only 10 key questions to consider about your trading plan, but also reviews the answers to each question. To help the reader, Headley provides his only personal trading rules and suggestion and his daily trading process. The bibliography contains about reference books on all aspects of investing and trading. There is a 9-page glossary of terms, and a list of 15 websites. In conclusion, Headley does a masterful job of providing traders with time-tested indicators, including two self-developed ones that he shares with readers. Readers of this book should be able to incorporate Headley's indicators into their trading strategies and come out way ahead of the crowd.
Rating:
Summary: Finally someone else who says day trading doesn't work
Review: The average investor is not made to be a daytrader. There money is not large enough to succeed, and when they use leverage to compensate they compound their problem by overleveraging. Mr. Headley points out all of these issues in his book. This book ... paves the way for a new generation of futures traders and stock traders. The only drawback is this book doesn't discuss the new security futures. Other than that it is a fine primer and reference book for years to come.
Rating: 
Summary: Sharing his perspective
Review: This represents an 'interim' review. I've read the book, but plan to make a second pass at a much slower pace. I may bounce the rating up to 5 when I get done. For now, the book gets a 4. I like the book a great deal. In particular, I really like Headley's highlighting of sentiment indicators. At the end of the book, he shares a summation of his trading discipline. Much of it is a quick summary 'The Disciplined Trader' by Mark Douglas. The readers would be well advised to read Douglas directly, but if the material is new, it ought to be worth the price of the book by itself. For me, I enjoyed the insight into Headley's life style. Headley's writing style strikes me as somewhat 'stream of consciousness', though. For example, while discussing his use of the Put/Call ratio, he states: "The next put/call signal occurs on February 16th, when the put/call ratio crossed back below the upper band to register a 49 percent reading on February 16th, after a 55 percent number occurred the prior day (February 15th). What you notice in this example is that the put/call ratio then has another surge above the upper band two days later, on February 18th at 63 percent. What should be done in these situations? Since a bullish position is already established, you should seek to follow the indicator and stay with the signal until it is either reversed by a sell signal (which would only occur at the other extreme, below the lower band, usually after a rally) or if the time is up for the trade (in the bullish case, after 15 trading days). As you can see in this case, ...." Along side these blow by blow trading commentaries, Headley presents the TradeStation EasyLanguage code for mechanically trading the QQQ based on sentiment readings. Why go into these daily details if he is just following a set of rules? Rather than spend time on the day by day commentary, I wish Headley had discussed the process of picking parameters for his trading system. Why 15 days for the long position but only 2 for the short? Additionally, without going through the day by day commentary with a fine tooth comb, I'm not sure he isn't bringing in extra considerations outside those in his mechanical trading system. Ditto for the divergence discussion. If you happen to be a TradeStation user, the code provided in the book won't run on the current version (TS 6). It's not that hard to up date, but don't expect to type the code into TS 6 and expect it to run. Also, the TradeStation datafeed doesn't offer the CBOE put/call ratio, nor convenient means of getting into the system, so it is a bit hard to try put/call ratio ideas out.
Rating:
Summary: Sharing his perspective
Review: This represents an 'interim' review. I've read the book, but plan to make a second pass at a much slower pace. I may bounce the rating up to 5 when I get done. For now, the book gets a 4. I like the book a great deal. In particular, I really like Headley's highlighting of sentiment indicators. At the end of the book, he shares a summation of his trading discipline. Much of it is a quick summary 'The Disciplined Trader' by Mark Douglas. The readers would be well advised to read Douglas directly, but if the material is new, it ought to be worth the price of the book by itself. For me, I enjoyed the insight into Headley's life style. Headley's writing style strikes me as somewhat 'stream of consciousness', though. For example, while discussing his use of the Put/Call ratio, he states: "The next put/call signal occurs on February 16th, when the put/call ratio crossed back below the upper band to register a 49 percent reading on February 16th, after a 55 percent number occurred the prior day (February 15th). What you notice in this example is that the put/call ratio then has another surge above the upper band two days later, on February 18th at 63 percent. What should be done in these situations? Since a bullish position is already established, you should seek to follow the indicator and stay with the signal until it is either reversed by a sell signal (which would only occur at the other extreme, below the lower band, usually after a rally) or if the time is up for the trade (in the bullish case, after 15 trading days). As you can see in this case, ...." Along side these blow by blow trading commentaries, Headley presents the TradeStation EasyLanguage code for mechanically trading the QQQ based on sentiment readings. Why go into these daily details if he is just following a set of rules? Rather than spend time on the day by day commentary, I wish Headley had discussed the process of picking parameters for his trading system. Why 15 days for the long position but only 2 for the short? Additionally, without going through the day by day commentary with a fine tooth comb, I'm not sure he isn't bringing in extra considerations outside those in his mechanical trading system. Ditto for the divergence discussion. If you happen to be a TradeStation user, the code provided in the book won't run on the current version (TS 6). It's not that hard to up date, but don't expect to type the code into TS 6 and expect it to run. Also, the TradeStation datafeed doesn't offer the CBOE put/call ratio, nor convenient means of getting into the system, so it is a bit hard to try put/call ratio ideas out.
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