Long/Short Market Dynamics: Trading Strategies for Today’s Markets

Market forces in the 21st century have become more titanic,diverse, subtle and multi-faceted than ever. Clive Corcoran deftlyexplains the reasons behind the paradigm shift and offers anabundance of practical ways to combat and profit from it. I waslate in submitting these comments because I kept gettingsidetracked testing ideas inspired by the text! There’s no need tofear that it’s not you father’s market anymore when you’re armedwith this kind of information.” – Art Collins, professionaltrader, and author of Beating the Financial Futures Market

“Corcoran’s in-depth knowledge of financial markets underlies atalent to express technically advanced concepts in accessible, yetthorough terms. His book is very carefully researched andbeautifully written.” – Professor Carol Alexander, Chair of RiskManagement and Director of Research, ISMA Centre, Business School,University of Reading

“Clive Corcoran has written an excellent book, backed up bysolid research and informative examples. This is one of mostilluminating works on trading techniques written in recent years.His incisive commentary of automated trading algorithms alone isworth the cost of the text. This is a must read.” – Alan Farley,Editor/Publisher, Hard Right Edge

Hedge funds are now the largest volume players in the capitalmarkets. They follow a wide assortment of strategies but theiractivities have replaced and overshadowed the traditional model ofthe long only portfolio manager. Many of the traditional technicalindicators and commonly accepted trading strategies have becomeobsolete or ineffective.

The focus throughout the book is to describe the principalinnovations that have been made within the equity markets over thelast several years and that have changed the ground rules fortrading activities. By understanding these changes the activetrader is far better equipped to profit in today’s morecomplex and risky markets. Long/Short Market Dynamicsincludes:

• A completely new technique, Comparative Quantiles Analysis, foridentifying market turning points is introduced. It is based onstatistical techniques that can be used to recognize money flow andprice/momentum divergences that can provide substantial profitopportunities.
• Power laws, regime shifts, self-organized criticality, phasetransitions, network dynamics, econophysics, algorithmic tradingand other ideas from the science of complexity are examined. Allare described as concretely as possible and avoiding unnecessarymathematics and formalism.
• Alpha generation, portfolio construction, hedge ratios, andbeta neutral portfolios are illustrated with case studies andworked examples.
• Episodes of financial contagion are illustrated with a proposed explanation of their origins within underlying market dynamics.