I would like to recommend to you and your customers the book Rocket Science For Traders by John F. Ehlers, ISBN 0-471-40567-1, who is the author of MESA and Trading Market Cycles. In it he introduces modern digital signal processing to the art of trading which has led to the birth and development of some profoundly effective new trading tools. Since market data is quantized in both amplitude and time (defining it as a digital signal), extracting meaningful information from it using only analog signals (represented as continuous time functions) alone can be very difficult and sometimes futile.

Although the book is written for traders about digital signal processing, and the mathematics behind this technology can be more advanced than that encountered in school, his clear chapter summaries and fully programmed systems make it a breeze for non-mathematicians. Mr. Ehlers rigorous analysis of the theoretical basis of various filter behaviors prepares the reader in the proper selection of filters and filter combinations to create really great indicators, predictors, and trading strategies. He offers lots of code to implement his techniques using TradeStation’s EasyLanguage which is easy to read and implement in other languages such as BASIC, C, C++, PASCAL.

I highly recommend this book for those who really want to get a better understanding of the mechanics of market fluctuations and to better exploit the inefficiency of the market for gain.

Regards,

Rich Nowak