Quantum Trading Using Principles of Modern Physics to Forecast the Financial Markets Wiley Trading Series

Original and thought-provoking, Quantum Trading presents a compelling new way to look at technical analysis and will help you use the proven principles of modern physics to forecast financial markets.

In it, author Fabio Oreste shows how both the theory of relativity and quantum physics is required to makes sense of price behavior and forecast intermediate and long-term tops and bottoms. He relates his work to that of legendary trader W.D. Gann and reveals how Gann's somewhat esoteric theories are consistent with his applications of Einstein's theory of relativity and quantum theory to price behavior.

• Applies concepts from modern science to financial market forecasting
• Shows how to generate support/resistance areas and identify potential market turning points
• Addresses how non-linear approaches to trading can be used to both understand and forecast market prices

While no trading approach is perfect, the techniques found within these pages have enabled the author to achieve a very attractive annual return since 2002. See what his insights can do for you.

Preface ix

Chapter 1 The Birth of Quantum Trading: How Einstein’s Theories and Quantum Particles Affect Your Daily Trading 1

A Lesson in Elementary Physics 6

P-Space: A Quantum Trading Tool 16

Chapter 2 How to Psychologically Prepare for Successful Trading 23

Life Goals and Quantum Strategies 23

Are Porsches and Supermodels Everything in Life? 26

How Do You Play the Game of Life? 27

Building Powerful Strategies Is the Key to Success 28

Creating Momentum in Life 30

Crossing the Bridge 32

Chapter 3 Quantum Trading 101 37

A Glimpse at Some Technical Analysis Problems 37

Making Money with Quantum Price Lines 40

Trading Rules of Thumb 47

Chapter 4 Sun Spots, Geomagnetic Storms, and the Stock Market 51

Defining Sun Spots and Geomagnetic Storms 53

Proposed Trading Strategies 58

Chapter 5 P-Space Structure and Quantum Trading Algorithms 63

Calculating a QPL 66

Calculating a QPL’s Subharmonics 70

Examples of Powerful QPLs and QPLSHs 72

Not All QPLs Are Alike 73

Trading with Intraday QPLs 76

Chapter 6 The Life and Contributions of W. D. Gann: A Forerunner of Quantum Trading 79

An Uncanny Master of Trading Interested in Atoms and Electrons 80

Gann’s Theory of Stock Market Cycles 84

Chapter 7 Chaos Theory and Gann Angles 91

How Gann Angles Originated 92

The Fall of the Stock Exchange in 2000 98

Chapter 8 Money Management Strategies 101

Why Some Traders Have Big Losses 102

The Dangers of the “Average Loss” Strategy 104

Noise, Hot Rumors, and Recommendations to Buy 105

Chapter 9 Entelechy: The Most Powerful Quantum Trading Concept 107

General Properties of Quantum Entelechy 109

QPL Entelechy 109

Angular Entelechy 113

Mapping and Trapping 114

Chapter 10 Forecasting Tops and Bottoms Using QPLs and Subharmonics 115

Forecasting a Top 116

Forecasting a Bottom 123

QPLSH Rule for 180-Degree Angles and 90-Degree Angles 127

Chapter 11 Time Algorithms in Quantum Trading 137

Peculiarities of Time Algorithms 138

Forecasting Tops and Bottoms with TAs 145

Time Algorithms’ Golden Rules 152

Chapter 12 How to Use All the Trading Tools Together 155

Chapter 13 How to Use Options: Unlimited Gains with Little Risk 171

Options Defined 171

Calls and Puts: Two Sides of the Option Universe 176

Strike Prices with Respect to the Underlying Price 176

The Components of an Option Premium 178

Intrinsic Value and Time Value 181

The Greeks: Fundamental Parameters of Options 187

Chapter 14 Options Strategies with Quantum Trading Tools 201

QPLSHs: A Powerful Indicator to Buy and Sell Options 201

Volatility-Based Spreads 205

Chapter 15 A Toast to a New Achievement in Trading 211

Conclusion: Making Peace with Mr. Market 217

Acknowledgments 221

About the Author 223

Index 225

FABIO ORESTE manages closed-end funds and managed accounts for private and institutional clients with the firm he founded, HF First Financial. In addition to this, he teaches classes on trading and financial engineering. Oreste earned a master's degree in business and finance from LUISS, a prestigious university in Italy. Before embarking on his financial career, he spent several years abroad in the United States, Tibet, Nepal, and China, where he studied philosophy and psychology.