After writing formally published book reviews for the past five years, and having read countless books on trading in the process, I find only a handful of titles that stand out in my mind as truly outstanding. Near the top of this list would be this book, which is authored by two professional futures traders, who reveal trading methods and techniques they have found to work consistently, based on many years of observation, research and actual application in the marketplace. Futures traders who use analytical or technical analysis software programs (such as eSignal) in their trading, or who are interested in day trading or trading system development, will discover a treasure chest of knowledge here.

The authors, Chuck LeBeau and David Lucas, CTAs and the principals of Island View Financial Group, run a highly successful managed account program. Successful trading performance automatically lends a great deal of credibility to the merit of the ideas, in my estimation.

The book is divided into four major sections. Two of them deal with the development and testing of trading systems. A short section deals with specific intraday trading techniques. The largest and most important section deals with the use and interpretation of the technical studies and indicators found in most analytical software programs.

The section on system development and research shows you how to build a trading system tailored to your own specific needs and trading style. It addresses the vital issues of identifying tradable markets, trend, timing of entries and exits, setting of stops and system-monitoring.

Also covered are optimization, testing methods, measurement of system performance, and testing of entries, stops, and exits. Several examples are given on how to create and test simple trading systems.

Computer traders will find the section on technical studies especially helpful and informative, the most extensive in the book. Unlike most references that deal with this subject, the emphasis is on how to use and interpret the studies, rather than their computation. The authors share their wealth of knowledge, garnered from many years of practical observation and testing.

All the major indicators are covered in depth: Directional Movement (the authors' favorite), channels, bands and envelopes, MACD, RSI, stochastics, and many others. They show how to use these technical studies and indicators effectively, both singly and in conjunction with each other. And, they demonstrate the conditions in which each is most effective, and many other practical tips, such as the optimum number of periods to use for various time frames and the relative value of the studies.

The "wavy lines" of formerly confusing indicators, such as the ADX / DMI, transformed from an apparent "can of worms" into an effective and helpful trading tool after reading this book. It is crammed full of valuable information from professional traders who make their living from the markets. It is easy to read and understand, and is profusely and effectively illustrated with chart examples throughout. The authors have definite opinions on issues such as optimization, system-testing techniques, money management and risk-control strategies -- and they are stated clearly and unequivocally. Also, not only does it show the reader what does work, it also shows what does not work in the very real world of day-to-day trading.

(Note: The above review was written by the undersigned some 15 years ago when this book was first published. My opinion of it has not changed in the interim…despite changes in the markets and the publication of many new books on the subject matter covered herein. It is still just as relevant today as when first written because people and, hence, markets do not change.)