“What a delight to bring it all down to earth. Our markets are an animal that will never be tamed but require basic understanding. This is a massive example of passion in a bottle. An easy read for anyone interested in living with the beast and making money.”
Kurt H.K Magnus, Director, Institutional Foreign Exchange, Westpac Institutional Bank, Australia
“What separates this work from others in the technical analysis field is its original yet practical nature. Rather than offer a prescription for what works and why, it is the openness to all methods, and the prescient assumption that what really matters is shifts between methodologies, that is the key to this work. How to make these shifts on the basis of volatility states and trading regimes is the sort of work that leaders in the field of asset management are currently pursuing. Murray Gunn’s work outlines how to do so, and brings that notion to the reader in the interests of education alone, and for that he should be commended.”
Craig Ferguson, Director, Antipodean Capital Management
“Murray Gunn reminds us that there is no one trading strategy that always works, and offers a strong collection of trend-following tools that can help portfolio managers move into profitable positions in the simplest ways. Gunn’s strategies are invaluable for the analyst performing in these dynamic and challenging times.”
Jeremy Fand, Portfolio Manager, Tudor Investment Corporation
When it comes to trading regime analysis what really works? Will following the trend give the best results? Or maybe fading the trend? Or perhaps doing absolutely nothing? It comes down to the age old question – what is the Holy Grail of market analysis? Of course, all wise investors know that there is no such thing, but if you can identify the periods when trending behaviour or range trading behaviour is most likely to occur then your chances of long term success in the markets are increased dramatically.
In contrast to the plethora of ‘guru guides’ claiming to hold all the secrets to market success, Gunn provides a pragmatic approach to trading and investing drawing on his own thoughts and experiences from two decades in the financial markets.
Gunn simplifies market analysis by presenting a bi-polar world where the market cycles between rising and falling volatility. These fluctuations are driven by cycles in human emotion which can be anticipated by using technical market analysis rather than the normally lagging fundamental analysis. Gunn highlights that timing is everything when it comes to investing or trading and that in order to take advantage of the changing dynamics of the market price it pays to become an observer of the overall market psychology.
Existing methods of anticipating volatility cycles are examined, such as orthodox pattern recognition, Japanese candlesticks and the Elliott wave principle, as are new areas of research, including implied volatility curves, the volatility smile and the Trading Regime Indicator (TRI). A range of examples are also given of how an appreciation of volatility conditions can enhance trading results and case studies are included to highlight the application that trading regime analysis has for a broad array of market participants.
About the Author
Murray Gunn is a currency investment manager with over twenty years experience in the international capital markets, managing portfolio risk across all asset classes within some of the world’s largest fund management organisations. He holds an MA (Hons) in Economics and is MSTA (Member of The Society of Technical Analysts).
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