There can be few books that have polarized opinion as much as Street Smarts by Laurence A. Connors and Linda Bradford Raschke. As a quick look at the reviews will reveal, the work is considered to be either the best thing available or a complete waste of money.

Ten years is a lifetime where the internet is concerned and there is a whole army of traders out there who are prepared to share and discuss their own activities, many of which will be based on their own versions of what is in this book.  Whilst I am not advocating any form of copyright infringement I have to say that while reading the book I kept thinking about other approaches that are remarkably similar and available at much less expense. This was just not the case back in the mid-nineties so the book would have appeared better value than it does now.

We should also remember that there have been so many other books published in the meantime, many of which may also be worthy of your attention.

The counterpoint to this must be that there is also so much rubbish out there from pretend traders who just want to make a quick buck. Even worse are those who have failed and can’t wait to make it clear how things have let them down. It can be very hard work to sift through all of this and only concentrate on the useful material so arguably a hundred pounds on a book that gives you the material from the original source is money well spent.

So instead of comparing Street Smarts with everything else that is out there, I will review the book on its own merit. This is done on the assumption that you are prepared to put the work into trying out what is recommended, using it as a basis for further exploration and development of your skills.

The first point to make is that this is not really a book for equity traders.  Although equities are mentioned and examples given of certain strategies applied to them, the overwhelming bias is toward the index and commodity futures markets.

The writing style is quite likeable, especially for those who do not like  ploughing through textbooks. Most of the main sections include a brief but concise introduction to the strategy, several charts showing real examples and some dialogue between the authors. The book is divided into four main sections along with the supplementary chapters you would expect. The real substance is devoted to tests, retracements, climax patterns and breakouts with the remaining chapters primarily covering the importance of money management.

Having worked through each of the four main sections, I was left feeling that I had learned some very interesting information and under normal circumstances would be keen to try the things out that had been suggested. These were not, however, normal circumstances. First of all there is no getting away from the fact that the examples are just plain old. At this price level I would certainly have expected the authors and publishers to have revised the work with more up to date examples that reflect changes in market behaviour and the availability of new products, the e-minis for example. Additionally the activities of the authors must have moved on considerably since they wrote this work and we should be allowed to access any new insights they have as a result.

The second difficulty is that most active and profitable traders will tell you that you must adapt as markets change. Strategies that serve you well in one phase may be completely redundant in another so why would you base your activities on material that is dated? Could it be that what is on offer here is timeless and that any changes are only variations on the original theme? Without the time to test every one of the strategies in a pure form I cannot really say and must leave you to draw your own conclusions from the brief overview I am able to give here.

In the section devoted to tests we are exposed to a number of strategies including the now somewhat infamous Turtle Soup and Turtle Soup+1. Both of these are described as structured methods to trade failures of tests and work based on the original Turtle concept of twenty day breakouts. An important point to make here is that you will wait a long time for one of these opportunities to present itself if you trade a small number of markets. The authors recommend that you monitor across all futures markets as something unusual will happen somewhere. This makes the use of the strategies more suitable to the full time trader with some experience as very few beginners would have the time or expertise to approach such scanning.

Experienced traders are also going to recognize some of the things they are already using, this certainly happened to me in the chapter devoted to 80-20’s where I learned the detail and background to something I picked up on a course some years ago. This is definitely one of the strengths of the book, those ‘ah yes’ moments when you see something that you had some awareness of clearly explained with further references to help you understand and apply the theories to an even greater degree.

The next chapter is dedicated to retracements and similar comments apply, for the inexperienced trader some of the material is going to be difficult whilst those with experience are going to find much of it of value. Amusingly there is a chapter called Holy Grail which the authors admit is a bit tongue in cheek.

They could not have known how prophetic this would be and how big a market would develop in selling the notion of a holy grail to greedy and the gullible.

The mood of the book changes in the third main section, particularly in the rather over titled chapter, ‘A picture is worth a thousand words’. These are described as purely subjective pattern recognition approaches with no precise rules and no requirement for indicators. The best advice we are given is to study the examples and look for similar ones in your own markets. This did not sit too well with the precise nature of the rest of the book, this is not to say that pattern recognition does not work but I was left feeling a little let down by the descriptions given.

My disappointment continued with the chapter on Wolfe Waves which are described by Bradford Raschke as the one of the most unique and effective techniques she has ever come across, so unique and effective that it warrants only a few pages.  Once again you can obviously go and search for more yourself but this is not really the point.

The remainder of the climax section is devoted to trading the news using a contrarian approach. 

The final section is about breakouts and starts with some very interesting work based on the familiar ‘inside day’ coupled with the work of Toby Crabel and studies of volatility. Having whetted my appetite I then discovered that, once again, this is a very short section. Only 18 pages are devoted to breakouts compared to the 44 pages on tests. This suggest that either the authors ran out of steam or had too much to fit in, either way I felt short changed.

The rest of the book is given over to further reminders about the importance of stops, some wise words about the overall ethos you need to adopt and some extra indicators thrown in for good measure but without the rigorous treatment  of the earlier part of the book.

So should you buy it or not? I really did like the book, it was a good read and certainly gave enough pointers to facilitate testing of the main strategies recommended. I also thought very highly of the style used and agree entirely with the important points made about trade management and trader behaviour.

Sadly these did not outweigh my concerns about the age of the examples and the resultant lack of proof that the strategies are still valid. I cannot believe that two people as active as Connors and Bradford Raschke will not have more up to date evidence to share with us and hope that this will lead to a revised edition.

In the meantime I cannot recommend it to you unless you accept the limitations I have described.

Book reviewed by Steve Anderton, co-founder of Tactical Trader, is recognised as a highly profitable private trader who came from the ‘outside’ and made trading work for him.