TRAMLINE TRADING BY JOHN BURFORD
A review by Zak Mir
It may be stated that one of the things that the world has in ample supply are books on trading. Only Ebola, career politicians, speed cameras / traffic wardens and taxes (not necessarily in that order) are possibly more unwelcome.
But at least as an antidote to the oversupply in the genre I can say that Tramline Trading is the best book I have read to date in some 25 years of reading up on the subject. Indeed, I would go even further to say that it is the best book I never wrote.
This is because the basis of John Burford?s tome are trend channels, which have appeared for so long on almost every piece of technical analysis I produce that I cannot actually remember how and when I first started to do so. Indeed, Burford has effectively reaffirmed my belief in the Tramline method, especially as even now it is a relatively underused and underappreciated way of analysing a market.
In fact, I came across Burford and his book by chance just a few days ago as he delivered his debut article on the Spreadbet Magazine blog. Ironically, while I am the Editor of Spreadbet Magazine, I had not heard of Mr Burford until only a few months ago and was interested to read his biography inside the front cover of his book. A ?lapsed? Phd Physicist who worked for NASA, he sounds like someone who would blind you with rocket science and be totally unreadable. But that is not the case.
One of the main problems with trading books in general is that they are either ABC guides, no use to anyone, even the beginner, or they are so complex even someone who has worked for NASA might be struggling.
But the high marks for this book derive in large part from the way that the author has pitched the degree of difficulty at the exact level to make it understandable, practical, and with strictly no nonsense or filler. Above all it is the humility that Burford clearly has with relation to the financial markets, conceding that in many ways everyone and anyone is only as good as their next trade. There is none of the rapper style boasting of big wins and successes that seems to be the fashion, especially amongst the so called seminar and financial ?education? gurus.
Of course, given the way that Tramline Trading is so key in my own analysis, a fair chunk of Burford?s book is preaching to the converted. Nevertheless, I think the way that he sets out this form of analysis is right on the mark. In many ways though, it is the way that he takes the agenda on in terms of combining the tramlines with Fibonacci and Elliott Wave analysis which is really quite helpful, and as far as I am aware unique.
Even better, the temptation to either overcomplicate Elliott Waves or skirt around the potential weak points in strategy ideas is to be admired. I have avoided Elliott Wave analysis wherever possible on the basis of it very often appearing subjective, overly complex and liable to be subject to last minute rethinks in terms of what the particular count in question may be.
One of the criticisms of many trading methods and indeed, trading books, is that while they may be great in theory, when one is faced with the hard right edge of the chart things are not so easy. Burford effectively addresses this issue in the form of his trading diary, covering several months around the end of 2013 / beginning of 2014 for Gold and the Dow. This provides a practical perspective on how to convert theory into money.
Given that I am familiar with much of the theory in Tramline Trading it is the Trading Diary which I would buy the book for in order to become familiar with how the ex Nasa employee tackles the ?final frontier? a.k. a. the financial markets.
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