Hedge fund manager Ray Dalio says that every time he learns something new or makes a mistake in the markets he writes it down so that he can go over it later and learn from it. I’ve been doing something similar and it does help keep a record of things. Here’s a list of the […]
Whatever your opinions are about the concept of back-testing, there are few better ways to build a trading system than through the back-testing of historical data. Back-testing allows us to answer critical questions like ‘how many positions should I hold in a portfolio?’, ‘how much risk should I take?’ or ‘how effective was this strategy in the past?’
Unfortunately trading systems often get discarded early on after a couple of poor back-test results. Sometimes it is better to improve an existing system than to start afresh with something new. In this article I look at 21 ways you might be able to improve on your existing trading system:
My goal is to bring new trading strategies to the table every month. Last month, I brought you details about building a trading robot with Excel and Interactive Brokers and this month I’m back with another excellent strategy from Peter Titus called The Big Volatility Short.
The benefits of creating an automated trading system are huge. With a profitable trading robot you can spend more time doing what you enjoy and less time watching screens. You can trade quicker, smarter and without emotion.
One of the keys to successful system trading is to be able to combine different strategies together. When you are able to combine less correlated strategies, it is possible to smooth drawdown, boost win rate and therefore improve your overall risk-adjusted returns. In Amibroker it is possible to combine equity curves together so you can see […]
Are you a struggling trader? Do you continue to lose money, even in a bull market? If you answered yes to either question, you are not alone. Financial trading is difficult and statistics reveal that at least 90% of traders lose money. The good news is that profitable trading can be attained with hard work and […]
There are more ways than one to exit a trade in Amibroker. It may sound obvious but trading strategies can benefit from being creative with exits as well as entries. In this post, I look at a simple way to come up with more flexible sell signals.
I wanted to write an article to explain some of the processes I go through when trading US stocks. Since August was a particularly quiet month with only a few winners I have decided to go back to a trade I made in July in Omnova Solutions ($OMN).
I have been using the free version of Finviz on a daily basis for several years. Just recently I decided to subscribe to Finviz Elite to take advantage of the live market data, more powerful screener and backtesting features. So far I have been more than happy with that decision. At $25 per month, I think the […]
In this article I take a look at the Udemy course ‘Learn to Trade the News‘. Udemy are currently having a 25% off sale on thousands of courses which you can access here. Coupon code = 25JBMARWOOD.
I mentioned in a recent article that one of the things I like best about Amibroker is the ability to import data sets from various sources and use it to create indicators. In this post, I show how to import TED spread data and import it into Amibroker. I then build a simple economic indicator that uses the […]
In the classic trading book, Reminiscences of a Stock Operator, Jesse Livermore spoke a little bit about a professional gambler called Pat Hearne. Pat would treat the markets like a casino game (such as roulette, faro or blackjack) and his strategy was to make a series of calculated bets, always looking for small, sure wins.
Traders tend to focus too much on fine-tuning their entry rules and choosing between stocks. Picking the right exit can be just as important, if not more important, than picking the right entry. After all, it is the exit that locks in your profit (or loss) and ultimately impacts the equity in your trading account.
I never recommend trading off tips. It doesn’t matter whether it’s your next door neighbour or Warren Buffett, if someone tells you to buy a stock you should always do your homework first before you put any of your own money on the line.
On the whole, it’s better to avoid trying to pick market tops and bottoms. If you try and pick the tops and bottoms every single day you’re going to get frustrated very quickly and wind up losing a lot of money.
Monte Carlo analysis involves the use of algorithms to generate random repeated sampling of results. Typically, Monte Carlo is used to run a large number of simulations in order to find the likely probability distribution of an unknown event.
Building an intra day trading system for trading futures, stocks, or forex is no easy task and many would say that in today’s markets it’s simply not possible. For one thing, the markets are not at all like they used to be.
Small cap stocks, or stocks with low volume, can be attractive for some traders who are looking for companies that the rest of the market might be ignoring. If a stock has low volume, it can often be near a reversal point as buying or selling peters out. Similarly, small cap, micro-cap, and penny stocks […]