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The Profitable Art and Science of Vibratrading. Non-Directional Vibrational Trading Methodologies for Consistent Profits. Wiley Trading

  • ID: 2243153
  • Book
  • October 2011
  • 264 Pages
  • John Wiley and Sons Ltd
An excellent book for all serious investors and traders who are looking for a more objective approach to profiting from the markets. This book teaches you how to generate returns regardless of market direction and focuses on generating vibrational returns across all price levels without worrying about balancing probabilities or win/loss ratios. This is definitely the greatest advantage of a non–expectancy based trading methodology. This book should be in every trader s library.

S.W. Wong

Former Vice President, Citibank Bhd. (M)

The author presents strategies for making consistent income that are easily implementable without the need to predict future price action. He masterfully combines vibrational, directional and bidirectional techniques within the constructs, giving traders a powerful and innovative way to maximize returns without ever having to top up trading capital since full earning potential is preserved at all times. This essentially gives a trader the opportunity to generate income for life, from a fixed initial investment that is never depleted. An indispensable book.
Conor McManus
Managing Director, C–Risk Management Sdn. Bhd

The financial world has undergone vast changes after the Lehman crisis. Among which, market volatility has increased tremendously against the headwinds from Europe and the US which inevitably affect Asia. There is a need for investors to stay invested despite mounting uncertainties in order to improve real returns while preserving capital. In this very challenging environment, author Mark Lim has shared in this book strategies designed to combat volatility and preserve earning potential which will be of interest to trading–inclined investors with a quantitative and disciplined approach.
Tan Beng Ling
Head of Research, CIO, Kumpulan Sentiasa Cemerlang

As a directional trader, I manage risk by employing a stop loss strategy, I was initially skeptical about Vibratrading′s "no stop loss" trading style. However, the author presents a comprehensive alternative that opens a fresh and different perspective. It is important for all of us to have an open mind, as the frontiers of all knowledge can only expand when we are prepared to assess new ideas. The Profitable Art and Science of Vibratrading offers a new and comprehensive approach to trading, without the stop loss method of risk control.
Jeffery Tie
Author, Aiki Traiding

Note: Product cover images may vary from those shown
Acknowledgments ix

Introduction xi

CHAPTER 1 Challenges to Conventional Trading and Investing 1

Directional vs. Non–Directional Methodology 1

Problem of Maintaining Long–Term Consistent Positive Expectancy 3

Predictive vs. Reactive Approaches to Risk in Trading 5

Trader Inactivity and Volatile Price Activity 6

Subjectivity vs. Objectivity in Trading and Investing 7

Filtering and Trade Signals 9

CHAPTER 2 Understanding the Basics of Order Entry 13

Common Trading Terminology and Definitions 13

Common Orders 15

Entry Orders for Bounded Vibrational Trading 17

CHAPTER 3 The Objectives of Vibratrading 19

Vibratrading as an Income Strategy 20

Introduction to the Components of Vibratrading 21

Main Components of Vibratrading 24

Meaning of the SISO and SOSI Acronyms 29

Basic Scaling Entries and Exits 31

CHAPTER 4 Controlling Risk in Vibratrading 35

Types of Risk 35

Risk Control Mechanisms 36

CHAPTER 5 The Mechanics of Equity–Based Price Action 47

Equity–Based Calculations 47

Market Value vs. Profit Potential 48

Price Leverage Ratio (PLR) 49

Money Leverage Ratio (MLR) 53

Buying Leverage Ratio (BLR) 53

Account Leverage Ratio (ALR) 58

Calculating the Initial and Current Market Value 62

CHAPTER 6 The Mechanics of Securitization and Monetization 63

Monetizing in Margin and Non–Margin Accounts 65

Securitizing Profits and Risk Capital 67

The Basic Principles of Price Action 68

The Effects of Negative Spread Bias on Reward to Risk Ratio 73

Hedged Price Action Principles 79

CHAPTER 7 The Principles of Boundedness 83

Capital Boundedness 86

Directional Boundedness 92

Range Boundedness 94

Order Entry Boundedness 97

CHAPTER 8 The Mechanics and Dynamics of Vibratrading 101

Vibrational Operations, Mechanisms, and Constructs 102

The Scale Factor 105

Capstone Mechanisms 108

The Macrososi Vibrational Mechanism 109

Macrosimo Mechanism (Upbuy – Upsell) 114

CHAPTER 9 Pyramidal–Based Vibrational Mechanisms 121

Microsiso 121

Interval Slip–Through 125

Macrosiso 129

Extracting Macrosiso Vibrational Profits 134

The Arbitrary Vibrational Construct 140

Upside Bounded Macrosiso and Microsiso 144

Unbounded Upside Macrosiso Mechanism 145

Unbounded Hedged Vibrational Constructs 145

CHAPTER 10 Diversification in Vibratrading 147

Bounded Versus Unbounded Zero Test Level Event 148

The Six Levels of Diversification 150

CHAPTER 11 Volatility Matching 157

Historical Range Volatility (HRV) 157

Event Trading (High Volatility Trading) 158

Range Zoning (Medium to Low Volatility Trading) 158

CHAPTER 12 Putting It All Together, Finally! 161

The Return Characteristics of Vibrational Constructs 162

A Brief Guide to Understanding the Scale Analysis Tables 162

Introduction to Vibradirectional Techniques 172

Calculating Working and Running Capital

within Vibrational Grids 176

Free Swing with Constant Capital per Level with Type 1

(Roll to Break–Even) 183

Gaps in the Grids 187

The Balance Between Opportunity Cost and Profitability 189

Free Styling across Multiple Levels without Risk Freeing 198

Unbounded Bidirectional Profit Capture Constructs 200

The "Big Hedge" Technique 202

The "Small Hedge" 203

The Upside Short Hedge 204

Zero Cost Hedging Technique for "Loading the Matrix" 205

More Constructs 206

Exiting With Profit 211

CHAPTER 13 The Vibrational Vehicles 213

Characteristics of Exchange Traded Funds (ETFs) 214

Types of Risk Associated with ETFs 215

Funds to Avoid In Vibrational Trading 217

The Replicated ETF Portfolio 222

CHAPTER 14 Comparison with Other Trading Systems 225

Vibratrading vs. Scale Trading 225

Vibratrading vs. Dollar Cost Averaging 225

Vibratrading vs. Value Averaging 226

Vibratrading vs. Buy and Hold 226

Vibratrading vs. Directional Trading 226

CHAPTER 15 Profiting from Non–Vibrational Flatline Price Action 227

The Basis for Non–Directionality 227

Riskless Short Options Trades 228

Using Short Options in Vibratrading 228

CHAPTER 16 Summary of Vibratrading 229

The Two Rules of Vibratrading 229

A Quick Recap 230

Choosing a Vibratrading Construct 234

The Importance of a Balanced Pyramidal Structure 238

Conclusion 239

Index 241

Note: Product cover images may vary from those shown
Mark Andrew Lim
Note: Product cover images may vary from those shown