The purchase of the book was easy and its delivery was prompt, even with the Amazon offer of free but relatively delayed delivery.

This is the second book of John Ehlers, a well-established pioneer in cycles and trend analysis for the technical analysis of stock price behavior. It is for advanced analysis, and it is a sequel to his classic book of "Rocket Science for Traders". You do need a math aptitude and some programming experience to get the maximum benefit of both books. John also offers eratta and corrections for minor typos in the formulas as well at his Mesa website.

Those who find this book of interest might also check on John Bollinger's classic book "Bollinger on Bollinger Bands", Steve Achelis' book on "Technical Analysis from A to Z", Steve Nison's book on "Japanese Candlestick Charting Techniques", and Martin Pring's "Technical Analysis Explained", Paul Murphy's "Technical Analysis of the Financial Markets", and "Technical Analysis of Stock Trends" by Edwards and MaGee. This is not a complete list, but a good start.

Remember that no single book offers the Holy Grail of investment. Stay objective to balancing your background, because investing mistakes can be the most expensive education you will ever have.

This is a book clear and very easy to read, for me as physics research, and to my development is very useful.
Strongly recommended.

John Ehlers newest title is sure to make even the brightest of brain surgeons quiver for fear of closing the renal artery prior to completing the operation. Other reviewers may diss this author but his latest book truly reaches for the stars and makes it. The chapters while short, are to the point and exquisitely illustrate the concept being taught. If you are new to trading systems the shortness of the explanations may be too short but for experienced traders and developers of trading systems they are long enough.

Aspects of many indicators are reviewed with fresh insight added for several new systems not talked about in print before. Removing the lag is the traders dream. Many of the indicators shown do work although errata in the code does spoil some of the implementations given. Ehlers has provided for the keener updates on his website that corrects the mistakes, kudos here for doing the right thing.

Overall Ehlers has done it again and this book should be a staple in any traders library. As for the wannabees wanting all the answers and sure fire methods, choose brain surgery as your career option. No one said trading would be easy but Ehlers has given more toolsets that a successful trader can use in a concise to the point book.

I have been trading for nearly 10 years now and have spent countless amount of time and money on books, systems, software and must say this the best book I have come across. With little creativity one can easy adopt ideas from this book to come up with a profitable mechanical system.

The computerization and digital signal processing development let improve classical indicators essentially due to application of modern methods of information processing to prices. Indicators began to smooth better and to delay less. However . First, the prices are non stationary, i.e. the characteristics of filters are varied during the time. Second, as different from technical problems, the kind of a signal and noise distributions for the price are unknown, i.e. nobody know what to filter actually. Third, being filtered by means of Fourier and similar methods prices change the previous values to the addition of the new data: we receive ideal trends under a history data but we can only trade them from right hand to left hand.

Fourier transformation is based on representation of initial series by the infinite sum of sinusoids with a various phase, amplitude and frequency. Recently wavelet transformations was widely adopted in various areas of data processing in which initial series are represented as the sum of some locally defined functions named wavelets. They are constructed by shifting and vertical and horizontal scaling of certain the prototype function. Wavelet transformation, in essence, is fractal that allows the effective using it in the technical analysis. First, it allows to carry out the multiscale analysis of prices, objectively identify trends on various scales by duration and amplitude, separate traders to various groups: scalpers, day traders, swing traders, position traders and long-term investors. The multiscale analysis can be interpreted as the analysis on various time frames. Second, it allows determine noise as the insufficient for reception of the profit amplitude and frequency movement of the prices that effectively allows filter the price series simply subtracting the lowest scale wavelets from it. Third, the additional filtration of white noise without delay is possible. Fourth, long-term trends are defined objectively. Fifth, wavelets do not contain optimized parameters in construct to standard indicators. Sixth, the used wavelets type is adapted to deal with the time ordered data and does not distorted on the last price values. Seventh, the used wavelet transformation is very effective computationally that allows use it in real time for the large massives of tick data. Eighth, it is effective to use wavelets as input data for neural networks and other methods of forecasting and recognition.

John Ehlers new book covers much of the same ground but goes beyond his previous book Rocket Science for Traders. Again the reader is given the explanations and theory for his indicators, smoothers and systems along with the Easy Language code for use in the Tradestation platform.

These indicators can be used as presented or can be easily adapted and combined with countless other indicators that a trader may currently be using. Certainly, the goal of any trader is to identify market tops or bottoms or at least to determine if markets are trending, behaving cyclically or entering a period of sideways or volatile movement. These indicators, alone or combined with others, can help one achieve that goal.

The reviewers of his previous book that had negative comments I believe, for the most part, missed the point entirely as it concerns John Ehlers subject matter and style. Hence, I am concerned that they will also make the same mistake when considering this book. Some believed the analysis was sophmoric while others were concerned with advanced theoretical questions concerning the mathematics presented. Since traders come from all backgrounds books like these need to be written to appeal to as many of them as possible. An electrical engineer will understand the concepts and why they might apply to equity and commodity markets and then can make any changes he/she sees fit with the code. Other readers that understand the problems with trading in trending vs non-trending markets can skip the DSP discussions and immediately use the indicators presented or use the code that determines cycle length to make their own indicators much more responsive to market conditions. Theoretical arguments aside, even the simple indictors included in this book take one way beyond the world of simple moving averages and stationary stochastics.

If nothing more, anyone burning the midnight oil searching for a way to beat the markets will be given endless, state-of-the-art ideas to keep him busy for a long time.

A book that worth traders and TradeStation users to look out for. A lot of interesting coding that worth explore

If I had the choice of picking just one book on TA, it would be this one!

The new technical indicators developed in this book are far superior to the traditional indicators like Exponential and Simple Moving Averages, RSI, Stochastics etc.

I don't have TradeStation, but the source-code for the indicators are well explained, so I translated TradeStation code to my Java based system in no time.

Basically the book deals with the marked using fairly advanced math for splitting the data in a trend-mode and cycle-mode. Traditional methods of smoothing the data using Simple/Exponential Moving averages are not bad, but they filter the data relatively poorly, so that there is a "leak" of higher frequencies into the result, giving the familiar whip-saws. To reduce the whip-saws, one is stuck with sometimes an unacceptable lag. For comparison, one of the technical indicators in the book, the Instantaneous Trendline, by applying more advanced mathematical filtering, cuts down on the whip-saws, but has virtually no lag!

This is just one example of the many new (revolutionary, I would say) ways of looking at marked data.


Of the oscillators I have implemented so far the Stochastic CyberCycle, but this togheter with the Instantaneous Trendline are themselves so good that I have dumped my usual EMAs, MACDs,
etc from my charts.

I'm really looking forward to the sequel of the book (if there will be one).

John Ehlers has again written a book that I believe is detined to become an "investment classic".

I have three things I look for in investment books and newsletters:
1) Original Research
2) Explained Methodology
3) Actionable Strategy

Many books deemed "classics" fail to meet one or more of these criteria. Very few meet all three. John Ehlers is rare in achieving all three with his works.

1) Original Research - Original research is key to being successful in the market. A technique that everyone knows is unlikely to work very well for trading or investing. Ehlers is a pioneer in applying advanced cycle measurement theory (MESA - Maximum Entropy Spectral Theory) to the stock market. In Cybernetics he extends and builds on his cycle work by also applying very advanced and sophisticated Digital Signal Processing (DSP) techniques to trading the market. More information on Ehlers MESA work can be found at www.mesasoftware.com. To my knowledge there is no one else using and reporting on the application of DSP to the market.

2) Explained Methodology - In my opinion this is where Ehlers really shines. While these DSP techniques are extremely sophisticated and mathematically intense, Ehlers cuts to the chase in a very concise fashion, explaining the core principles, presenting the math, but leaving the derivations and complication to the textbooks and the engineers. Ehlers makes the techniques acceessible to the trader/investor without trying to turn the reader into an Electrical Engineer.

3) Actionable Strategy - all the tools presented in the book are fully disclosed and accompanied by complete TradeStation Easy Language Code and eSignal Formula Script (EFS). In addition the code can be purchased from www.mesasoftware.com for a modest cost, to save yourself the typing and debugging time (your time is worth something). I use TradeStation. With the fully disclosed code, all of the indicators can be displayed, modified (if desired), combined with one another or other indicators, and your own systems created. Those systems can then be back-tested in TradeStation to see how they performed. They can also be optimized and otherwise worked with to create systems that work for you.

Ehlers has created a "cookbook" of indicators that use some of the most advanced concepts ever applied to the market.

Ehlers states: "... (the) historical performance of these systems is on a par with or exceeds, the performance of systems that would cost you thousands of dollars to purchase". Analysis with TradeStation confirms this.