Humans have been trying to time the stock market with fancy indicators since the beginning of time. But do they work? In this article I test five different market timing indicators. They are: Coppock Curve Zweig Breadth Thrust Arms Index (TRIN) McClellan Oscillator No. Of New 52-Week Lows These market indicators are all available with […]
The benefits of having a profitable trading system are clear. Wealth generation, freedom, reduced stress. But there are problems too, which most system developers sweep under the carpet. In this post we will look at some of the disadvantages associated with trading systems. 1. Trading Systems Can Have Lengthy Drawdowns Unfortunately, it’s not uncommon to […]
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 […]
Debate has raged for years as to whether or not technical analysis is actually a useful tool in helping to generate long run profits in the markets. For some, technical analysis is no more than hocus pocus. An approach that is based on faith rather than legitimate science. For others, technical analysis is the foundation of […]
Warren Buffett is an example of someone who recognises the importance of reading. It’s been said that he spends 80% of his day reading and thinking and can read up to 600 – 1,000 pages a day. As a system trader it is also important to read and to keep on top of new developments in […]
Stocks don’t move in a single direction and if you have enough reason to believe that share prices are about to go down, then there are ways to profit from betting against them. However, betting against stocks is much trickier compared to going long and there are several factors to consider before you short.
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:
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.
What matters most to history are not the steady trends but the unexpected shocks that change the world the moment they occur. Such events are inherently unpredictable even though they always seem explainable after the fact.
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 […]
It is often easier and more useful to try and disprove something than to prove it is categorically true. By running experiments we can learn just as much by understanding what doesn’t work as we can from looking at what does supposedly work. I decided to run some simple tests on historical stock market data […]
To succeed in the financial markets you need to have some kind of system in place. Trading systems protect the trader from his ‘inner chimp‘ – the limbic side of the brain that relies heavily on emotions and gut instinct. The inner chimp is quick to react and respond to incoming dangers. It often makes snap […]
In this article I look at some of my favourite intraday trading patterns including naked price action patterns and Japanese Candlestick patterns.
The Fed cut rates back to zero, Facebook becomes the biggest company in the world and Donald Trump causes the next Great Depression. Read on to see my 10 Outrageous Predictions For 2016 and let me know what yours are…
Quantitative trading involves the use of mathematical calculations, data analysis and number crunching to seek out profitable trading opportunities in the financial markets. Price, volume, and fundamental data can all be used to formulate quantitative trading strategies depending on what it is you are hoping to achieve. In the rest of this article, I will […]
With everyone talking about the Federal Reserve this week, there is an awful lot of noise surrounding what the Fed will or won’t do. It’s at times like these where it pays to keep a bit of perspective and remember to not do anything rash. Following are a number of charts that I have compiled […]