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Why Day Traders Fail (Avoid The Pitfalls)

Posted on February 26, 2021February 26, 2021 by Oddmund Groette

Day trading certainly holds promises of a fast-paced working environment with high returns. Its allure proves practically irresistible to many new traders. It is also a common belief that most

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Trading Strategies And Correlations

Posted on February 25, 2021 by Oddmund Groette

Correlation, which measures the relationship between two datasets, is an essential variable for a trader. How your positions move in relation to other positions is crucial to understand and manage

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How Can A Beginner Start Trading?

Posted on February 22, 2021February 22, 2021 by Oddmund Groette

Are you looking to start trading but are unsure what steps need to be taken? Or have you dipped your toes in the water but are struggling to find the

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Retail Seasonalities

Posted on February 20, 2021February 20, 2021 by Oddmund Groette

Are there any seasonalities in retail stocks? Some years ago, Jay Kaeppel published an article about retail seasonalities. Put short, the best month for retailers are November, March, and February

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How To Deal With Drawdowns

Posted on February 18, 2021 by Oddmund Groette

If you can’t stomach 50% declines in your investment, you will get the mediocre returns you deserve. Charlie Munger The share price of Berkshire Hathaway has declined more than 50%

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8 Pros And Cons Of Quantitative Trading

Posted on February 17, 2021February 17, 2021 by Oddmund Groette

Quant trading, an abbreviation for quantitative/quantified trading, is growing in popularity because of the possibility of having the computer do all the work and reduce emotions and behavioral mistakes. This

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Trading Or Investing – What Is Best?

Posted on February 15, 2021February 17, 2021 by Oddmund Groette

Trading and investing are entirely different ballgames. Both have the same aims, to grow your wealth, but they have various time commitments, risk profiles, and outcomes. Trading has been around

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Heikin Ashi Explained (How To Use It)

Posted on February 11, 2021 by Oddmund Groette

A reader recently asked if we use Heikin Ashi in our trading. We don’t. Neither of us has ever heard of Heikin Ashi! So what exactly is Heikin Ashi? In

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Can You Get Rich By Automated Trading?

Posted on February 9, 2021 by Oddmund Groette

There are many reasons why someone might like to become an automated trader. Freedom, independence, wealth, and scalability are a few reasons why someone starts trading, but we suspect the

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The Sharpe Ratio Explained (With Examples)

Posted on February 5, 2021February 5, 2021 by Oddmund Groette

The Sharpe Ratio is a popular and widely used parameter for comparing the return and its risk. The name is given from its inventor, William Sharpe, who developed the ratio

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The Profit Factor Explained (With Examples)

Posted on February 1, 2021 by Oddmund Groette

How do you evaluate a trading strategy? In hindsight, it’s easy to judge a strategy by the result – the CAGR or the annual return. However, this is what Annie

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Do Candlesticks Work? A Quantitative Test Of 23 Candlestick Formations

Posted on January 29, 2021January 31, 2021 by Oddmund Groette

This article explains candlesticks and why we like to use candlesticks when displaying charts. Moreover, we test quantitatively 23 different candlestick formations. Perhaps surprisingly, some of the formations work pretty

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How Jim Simons Made 66% A Year By Using Quant Strategies (The Medallion Fund)

Posted on January 24, 2021January 24, 2021 by Oddmund Groette

Jim Simons recently stepped back as the chairman of Rennaissance Technologies, the asset management group that manages the most profitable fund ever: The Medallion Fund. Simons is the founder, biggest

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Does The MACD Indicator Work? (Including Strategies)

Posted on January 20, 2021February 22, 2021 by Oddmund Groette

This article looks at the MACD-indicator, what it is, and how you can use it. Does it work? In which markets does it work best? Which timeframe is best? These

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Larry Connors’ Multiple Days Up And Multiple Days Down Strategy

Posted on January 13, 2021February 22, 2021 by Oddmund Groette

Chapter 6 of Larry Connors’ High Probability Trading contains a strategy called Multiple Days Up (MDU) And Multiple Days Down (MDD). The book was published in 2009, the trading tests

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How To Become A Successful Quant Trader

Posted on January 11, 2021January 11, 2021 by Oddmund Groette

There are many approaches on how to make money in the markets. Some use fundamental factors, others use technical analysis, while others might crunch numbers to get an edge. The

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What Happens After A Sell-Off On The First Day Of The Month?

Posted on January 6, 2021 by Oddmund Groette

The first trading day of 2021 started with a “mini-crash”. The S&P 500 fell 1.36% and the Nasdaq fell 1.41%. We have previously established the end of the month effect:

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Larry Connors’ %b Strategy (Bollinger Band)

Posted on January 5, 2021February 22, 2021 by Oddmund Groette

In chapter 5 of Larry Connors’ book High Probability Trading, published in 2009, there is a strategy called %b strategy. The book contains many strategies which we test in chronological

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Are The Bollinger Bands Profitable? (Including Strategies)

Posted on December 29, 2020February 22, 2021 by Oddmund Groette

The Bollinger Bands are renamed after its inventor, John Bollinger. The indicator was invented in 1980 and made John Bollinger a pretty famous trader. The bands are included in all

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The January Effect That Works

Posted on December 27, 2020December 27, 2020 by Oddmund Groette

On page 279-280 in The Education of a Speculator, Victor Niederhoffer explains his version of the January effect: The gain in January determines the average gain the next 11 months.

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The January Effect In The S&P 500 (Does It Still Work?)

Posted on December 27, 2020December 27, 2020 by Oddmund Groette

The January effect is a well-known anomaly. To our knowledge, it was published as a strategy for the first time in 1962, according to Victor Niederhoffer in the book The

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The End Of The Year Rally In The S&P 500

Posted on December 27, 2020December 27, 2020 by Oddmund Groette

We are now entering one of the (historically) strongest periods of the stock market: the last days of the year plus the first days of the next year. Back in

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What Is A Good Trading Strategy?

Posted on December 23, 2020December 23, 2020 by Oddmund Groette

First things first: The first thing you need to understand is that the perfect strategy doesn’t exist. Many keep looking for the perfect indicator or the perfect setup, or they

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Larry Connors’ R3 Strategy (It Still Works)

Posted on December 21, 2020February 22, 2021 by Oddmund Groette

Today we continue backtesting the strategies Larry Connors and his team published in 2009 in a book called High Probability ETF Trading. All the strategies were tested on a basket

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Larry Connors’ RSI 25 & RSI 75 (It Still Works)

Posted on December 15, 2020February 22, 2021 by Oddmund Groette

High Probability ETF Trading, published in 2009 and written by Larry Connors and Cesar Alvarez, contains some interesting strategies. They are all mean revertive and tested on the most popular

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Larry Connors’ 3 Day High/Low Method (Does It Still Work?)

Posted on December 14, 2020February 22, 2021 by Oddmund Groette

Larry Connors and Cesar Alvarez published a book called High Probability ETF Trading in 2009. All of the strategies covered in the book showed great results, but almost 12 years

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Are Moving Averages Good Or Useless? (Quantified Analysis)

Posted on December 11, 2020December 14, 2020 by Oddmund Groette

Moving averages are widely discussed and used in the media and likewise frequently used by analysts when making calls about the future. Most traders and investors have probably heard about

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Ways To Use ADX (Average Directional Index | Does It Work?)

Posted on December 8, 2020December 8, 2020 by Oddmund Groette

This article looks at the ADX indicator. The indicator was developed by Welles Wilder and released in his book from 1978 called New Concepts In Technical Trading Systems. Mr. Wilder

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Why Build A Portfolio Of Quantified Strategies (Including Two Strategies)

Posted on December 7, 2020December 7, 2020 by Oddmund Groette

The most important task of a quantitative trader is to find trading edges and subsequently turn them into good stand-alone strategies. However, many traders neglect to test how those strategies

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How The RSI Indicator Works (How To Use It In Trading)

Posted on December 2, 2020February 22, 2021 by Oddmund Groette

The Relative Strength Index (RSI) was developed by Welles Wilder and first introduced in a magazine called Commodities (now Futures) in June 1978. Wilder published a book in the same

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How To Fail As A Trader: 11 Skills Of The Unsuccessful (Inverse Thinking)

Posted on November 30, 2020November 30, 2020 by Oddmund Groette

Always inverse, says the famous investor Charlie Munger, Warren Buffet’s friend and business partner. What is inverse thinking? This is when we turn a problem on its head or look

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The Elder Ray Indicator (With Quantified Examples): Does It Work?

Posted on November 25, 2020November 30, 2020 by Oddmund Groette

In a series of articles, we want to test different indicators and trading techniques. Almost all indicators are “proved” by anecdotal evidence, and rarely quantified. That’s perhaps not a coincidence:

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Why You Shouldn’t Trade Penny Stocks (Why Avoid Them)

Posted on November 21, 2020November 25, 2020 by Oddmund Groette

Penny stocks attract a lot of attention, both among investors and traders, but also among scammers, unfortunately. The traps are many, and we recommend to stay away from penny stocks.

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Why Scalping Is A Waste Of Time (Do This Instead)

Posted on November 16, 2020December 29, 2020 by Oddmund Groette

We don’t recommend scalping. Scalping involves competing with better-equipped traders and institutions, you need to deal with lots of randomness, and you most likely end up both wasting your time

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How To Find Trading Edges In The Markets (With Examples)

Posted on November 13, 2020February 23, 2021 by Oddmund Groette

Having some kind of an edge in the markets is crucial to make money. The financial markets are a competitive place where amateurs and beginners are easy prey for the

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Popular posts:

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  • RSI(2) On QQQ (Nasdaq)
  • Moving Average and ATR As Mean Reversion
  • Daytrading
  • S&P 500 Mean Reversion Using IBS and RSI
  • The Internal Bar Strength (IBS) Indicator
  • Being Slightly Bonkers Can Serve You Well
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  • Buy When S&P 500 Makes New Intraday High?

Recent posts:

  • Why Day Traders Fail (Avoid The Pitfalls)
  • Trading Strategies And Correlations
  • How Can A Beginner Start Trading?
  • Retail Seasonalities
  • How To Deal With Drawdowns
  • 8 Pros And Cons Of Quantitative Trading
  • Trading Or Investing – What Is Best?
  • Heikin Ashi Explained (How To Use It)
  • Can You Get Rich By Automated Trading?
  • The Sharpe Ratio Explained (With Examples)
  • The Profit Factor Explained (With Examples)
  • Do Candlesticks Work? A Quantitative Test Of 23 Candlestick Formations
  • How Jim Simons Made 66% A Year By Using Quant Strategies (The Medallion Fund)
  • Does The MACD Indicator Work? (Including Strategies)
  • Larry Connors’ Multiple Days Up And Multiple Days Down Strategy
  • How To Become A Successful Quant Trader
  • What Happens After A Sell-Off On The First Day Of The Month?
  • Larry Connors’ %b Strategy (Bollinger Band)
  • Are The Bollinger Bands Profitable? (Including Strategies)
  • The January Effect That Works

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