In a previous article we looked at the effects of introducing price to earnings data to a mean reversion strategy. Although the effects were quite small, we found that we could improve a simple RSI strategy by avoiding stocks with negative PE ratios. We also found that stocks with PE ratios over 15 produced higher […]
A reader asked what my thoughts were on bitcoin and what kind of strategies I would recommend to trade this type of market. I don’t want to get dragged into an opinion piece but I will say that there seem to be an incredible number of amateurs involved in bitcoin which could end badly.
The concept of trend following is based on the belief that security prices move in upwards or downward trends over time and that the surest way to profit from those moves is to attempt to ride those trends. Despite some claims that trend following is a strategy for nonconformists, trend following is in fact hugely popular, particularly among […]
In this post I take a look at one of the greatest traders of all time, Jesse Livermore. Jesse was famously profiled in the classic investing tome Reminiscences of a Stock Operator, a book that has been called the best trading book every written. This is a long piece, clocking in at around 9,000 words and it covers […]
In this post I test nine different moving averages in order to see which is the best moving average for trading. Two different strategies and markets are tested. The results may surprise you.
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.
In this article I look at some moving average crossover strategies and I investigate which moving average crossover lengths are the most effective.
A number of students on my trend following course have mentioned a couple of different trailing stop ideas, so I thought I would put them to the test and see how they perform. Following is an exploration into two different methods; an idea from Nick Radge and a chandelier stop from Charles Le Beau.
While trends differ in size, global supertrends can cover several decades and in some cases, span generations. And in this article I will look at 20 possible supertrends and how investors might benefit from them.
Recently, a reader questioned the trading systems that are presented in my book and course. I do not actually know whether they bought the book or the course or not but they emailed me to say that none of the trading systems presented work.
People often want to know whether forex trading is profitable. They see a strategy online promising 1000% returns and millions of dollars in profits and wonder whether they too can become successful forex traders. On the flip side, though, they will also have heard the stories of those traders who have lost money and in […]
In this article I look at a simple 50 day moving average strategy and use the simulator from Amibroker to test the strategy on the stock market. When it comes to technical analysis and trend following there is no shortage of naysayers. Academics like to say that markets are perfectly efficient and that short term […]
Trend following is an investment strategy based on the technical analysis of market prices, rather than on the fundamental strengths of the companies. Wikipedia My own view is that trend following is not necessarily based on technical analysis, which can sometimes have a bad name. I believe trend following is more about the philosophy that […]