The Relative Strength Index (RSI) is a go-to tool for traders, signaling when a stock or index might be overbought or oversold. But what happens when the market stays in that oversold zone for an extended period? Specifically, how often…
The stock market has been on fire for the last decade, causing the impression that it reached an all-time high almost every day. However, this is only a perception because all-time highs are quite uncommon. Let’s make an all-time high…
In the ever-evolving world of financial markets, traders are always looking for new ways to understand price movements and indicators like the True Strength Index (TSI) come in handy. What do you know about this indicator? The True Strength Index…
In the fast-paced world of financial markets, traders are always seeking new indicators to perform better technical analysis and improve their trading game — one such indicator is the Range Expansion Index (REI). What do you know about this indicator?…
The magic behind Jim Simons’ trading strategies consists of collecting an enormous amount of data and analyzing the data to find statistical patterns and non-random events in a wide range of markets. Furthermore, Jim Simons and Renaissance Technologies have put…
Ascertaining the market condition is often necessary but can be very difficult, which is why the choppiness index can be very powerful for your trading. What do you know about the choppiness index? The Choppiness Index is an indicator created…
There are many technical analysis indicators available on many trading platforms for analyzing the markets, and one of them is the market facilitation index (MFI). What do you know about this indicator and how to use it? The market facilitation…
The S&P 500 can feel like a wild ride, especially during a “bad year” with negative returns. Whether it’s a steep 38% drop like in 2008 or a milder 6% dip in 2018, these downturns raise a big question: how…
Have you ever wondered if your money could double in a decade just by investing in the stock market? It’s a question that sparks curiosity for anyone looking to grow their savings – whether it’s for a dream home, retirement,…
Easter is a Christian holiday celebrated across the world. But does it affect trading on the U.S. stock exchanges and other financial markets? We look at how the stock market performs before and after the Easter holiday. Additionally, we specifically…
CAGR, or Compound Annual Growth Rate, is crucial for trading strategies as it measures the mean annual growth rate of an investment over a specified period. It’s essential for comparing the performance of different investments and assessing their risk and…
In the fast-paced financial trading world, using the most responsive indicators for your technical analysis is key to catching the right moves in time, and this is where the Adaptive Laguerre Filter comes in. What do you know about this…
Yes, the turtle trading strategy still works today. It is a trend-following strategy, so it works in markets with clear trends. While the original strategy, which is based on identifying breakouts, still works reasonably well, traders have modified the turtle…
It costs money to trade, and one of the costs is commissions to your broker. No one works for free, but luckily costs have gone down a lot the last two decades. What is a commission trading, and how important…
Determining the right mix of assets to help you reach your short-term and long-term financial goals is the key to building a winning investment portfolio. For many years, financial advisors and experts recommend the 60/40 portfolio because of its simplicity…
Imagine a year where the stock market, often a rollercoaster of gut-wrenching volatility, decides to take a breather—finishing almost exactly where it started. No dramatic gains, no catastrophic losses, just a quiet, steady hum. How often does the S&P 500,…
When the stock market takes a nosedive, panic sets in fast. Portfolios bleed red, headlines scream doom, and every investor wants to know: How long will this last? How long does it take for stocks to hit bottom—that critical point…
Seasonal changes and Seasonality trading strategies play a big role in financial markets and can really affect how much money traders make. When traders spot patterns that happen regularly, they can make smarter trades and maybe earn more money than…
What is a market regime indicator? A market regime indicator is a tool or metric used by investors and analysts to categorize or characterize the current state or condition of a financial market. It helps in understanding whether the market…
How many times have we witnessed in our trading systems how trades move against our position? Many! Well, in this article, we will see how to analyze this behavior in our trades and what conclusions we can draw from them…
A trading edge gives you an advantage over the other players in the marketplace. You find trading edges by trading real money, getting experience, by walking and brainstorming, being systematic, reading websites, and having contact with other more successful traders. …
Trading performance and strategy metrics are important parameters to evaluate the quality of your trading strategy + both for your live trading strategy or if you are backtesting. Just looking at the end result, the CAGR or the annual returns,…
What are Market Timing Strategies? Plenty of investors try to time the market. Most are unsuccessful due to a number of reasons. Thus, most investors should not time the market. However, most of the failures can be attributed to a…
Programmers and coders often fail in trading because they look at the market like science. But the market is completely different from math and other sciences. The market is non-stationary, non-binary, and evolves all the time. You need “alpha skills”,…
Simple vs complex trading strategies have a clear winner: Simple trading strategies trump complex trading strategies. Trading needs to be simple and easy. Our aim is to build and create simple automated trading strategies and trading edges that you can…
How can you hedge against huge losses from totally random and unpredictable events? How can you insure yourself from devastating losses that come out of the blue? This is what tail risk hedging strategies are all about. Tail risks in the stock…
Let’s look at the tax day trading strategy because most US taxpayers have a deadline on the 15th of April to file their tax returns. If the date is on a Saturday, Sunday, or legal holiday, the due date is…
What happens to stocks when bonds go up? Any stock investor or trader should have a basic understanding of the relationship between stocks and interest rates. Why? Because the interest rates influence investors’ risk appetite. When interest rates are high,…
The risk of ruin in trading is mostly ignored by traders. Most traders are optimists, but the difference between defense and attack is often tiny. What is the risk of ruin in trading? Can the risk of ruin in trading…
FOMC meetings can have a significant impact on financial markets as decisions on interest rates made during these meetings can influence the direction of monetary policy and market expectations. Many traders look forward to them and trade the immediate volatility…
One of the most important factors in trading is trading volume, as it represents the amount of buying and selling that goes on. One strategy that makes good use of trading volume is the value area trading strategy. What is…
Just as traders use technical indicators to attempt to predict the future direction of an asset, quantitative analysts also utilize various statistical and mathematical models to forecast the future values of assets, with one of these models being the Kalman…
Navigating the fast-paced world of financial markets requires using tools that can show you the direction and strength of the current price trend — one tool that can help is the linear regression slope indicator. What do you know about…
Is a higher sharpe Ratio better?
A commodity trading advisor (CTA) is an individual or organization that provides personalized advice and services related to trading in futures contracts, commodity options, and retail off-exchange forex contracts or swaps. It could also be a fund that uses a…
Win ratio in trading
High low strategy
This review of Amibroker is based on many years of live trading. Prior to using Amibroker, I was trading semi-automatically by using a simple script in Excel. Having focused solely on stocks since 2001, I decided to start looking into…
Quad witching (quadruple witching) refers to the expiry of four financial derivative contracts on the same day: stock index futures, stock index options, single stock options, and single stock futures (the latter have low volumes and are most likely not…
Quant strategists employ different tools and systems in their algorithms to improve performance and reduce risk. One is the Monte Carlo simulation, which is quite powerful regarding option pricing or risk management problems. A Monte Carlo simulation represents the likelihood…
The ATR indicator is useful on its own and can be used to develop an Average True Range trading strategy. The Average True Range (ATR) was developed by Welles Wilder in the 1970s. In his famous book called New Concepts…
If you have ever looked at a stock chart, you would know that stock prices often swing about, which is why some people trade the swings for quick profits rather than wait out the inevitable downturns. However, most stocks rise…
You can develop and create profitable short-selling strategies and systems, but you can’t expect to find many; they normally trade infrequently. This article presents several short-selling strategies in the S&P 500 (SPY and ES) and consumer staples (XLP). Moreover, we…
St. Patrick’s Day is an important day for Catholics. Is the day just as green for stocks as for those celebrating? St. Patrick’s Day is one of the best days of the year for stocks, but that is thanks to…
Is a stop loss good or bad? What is the best stop-loss trading strategy? Are there alternatives to a stop-loss? How many different stop loss strategies are there? One mantra is repeated when you read books and blogs about trading:…
The Ichimoku trading strategy uses a technical analysis indicator that defines support and resistance levels, shows the trend direction, and gauges the momentum of the trend. It does this by plotting multiple averages on the price chart, which forms a…
The 9/30 trading strategy is a trend-following strategy that uses two moving averages — a 9-period EMA (exponential moving average) and a 30-period WMA (weighted moving average) — to spot trading opportunities when there is a pullback. The 9-period EMA…
New traders often think that there is that one indicator that would help them make big profits from the market all the time. Unfortunately, there is none, which is why the triple screen strategy was invented to exploit the strong…
Moving averages are known to reduce market noise and smooth the price data, but that often comes with a lagging tendency — this is what makes the Zero Lag Hull Moving Average (HMA) a special indicator. What do you know…
A trader in a losing stock position has only a few options: they can close the trade at a loss and look for opportunities elsewhere; they can hold the losing position for a while and hope that the price will…
Ray Dalio’s All Weather Portfolio is a pretty well-known portfolio, and for good reasons, in our opinion. Ray Dalio and his team at Bridgewater Associates constructed the All Weather Portfolio to withstand every economic environment (and shocks) possible. What exactly…
How to calculate the Sharpe Ratio in Python
David Swensen was the President and Chief Investment Officer of Yale University endowment from the mid-1980s until his death in May 2021. Swensen, along with Dean Takahashi, invented The Yale Model. Let’s take a look at the David Swensen Portfolio…
Many traders look at the gold and S&P 500 ratio. The ratio can be used to create sector rotation strategies are popular. One of the reasons is the anticipation of better and more efficient capital allocation, and perhaps a second…
The dual momentum trading strategy by Gary Antonacci, what is that about? As the Oracle of Omaha, Warren Buffett, once said: “Trying to time the market is the number one mistake to avoid.” It is almost impossible to consistently time…
Trading securities can be as simple as clicking the buy or sell button on your trading device, and the trade orders get executed. While that may be true for retail trading, it may not be so for institutional trading which…
Python is one of the most popular programming languages in finance. It is widely used for data analysis, machine learning and, of course, backtesting trading strategies. Today we will show you how to calculate and backtest a MACD, Moving Average…
In the fast-paced world of financial trading, traders are always seeking new approaches to improve their analysis of the markets — this led to the creation of the Market Thrust indicator. What do you know about this indicator? The Market…
The Python code language allows for backtesting and executing Python Trading Strategy Algorithms. Python is an open-source, high-level yet easy-to-learn computer programming language that is used in a wide variety of applications, including algorithmic trading and data analysis. With all…
The higher highs and higher lows pattern signals an uptrend. Is this likely to continue or reverse? In almost all markets, the higher high and higher low pattern signals weak future short-term gains. Unfortunately, it doesn’t work as a short…
The lower highs and lower lows pattern signals a downtrend. Is this likely to continue or reverse? What is the meaning of a lower highs and lower lows pattern? In almost all markets, the lower high and lower low pattern…
The Nasdaq E-mini 100 futures contract is an electronically traded stock market index futures contract based on the Nasdaq 100 index — an index of the largest 100 non-financial companies listed on the Nasdaq stock exchange. The index is primarily…
There are many exponential moving average (EMA) strategies, but the 50 EMA strategy is one of the most commonly used among traders in different financial markets. Let’s take a look at this 50 EMA trading strategy. The 50 EMA strategy…
If you are a forex day trader and looking for an effective way to beat the smart money, the London breakout strategy may be your guy. Wondering what the London breakout strategy is? Also known as the London daybreak strategy,…
Mark Spitznagel, Safe Haven – Investing For Financial Storms: What role can risk-mitigating and defensive assets play in a portfolio? Do we use them only to seek shelter until the passing of financial storms? Contrary to what we learn at…
Profit Factor is a key performance metric used in trading to assess the profitability of a trading system or strategy. It’s calculated by dividing the total profit generated by winning trades by the total loss incurred from losing trades. Essentially,…
The options expiration happens on the Friday before the 3rd Saturday of each month in the US. An often referred to effect is the options expiration week effect. Is this effect real, or is it just a myth? In this…
The Turnaround Tuesday Trading Strategy The Turnaround Tuesday effect happens from the close of Monday’s trading session until (at least) the close of Tuesday’s trading session. The effect is no myth! Let’s do some backtesting to find what seems to…
Trading quotes encapsulate the hard-won wisdom of Wall Street’s elite, offering profound insights into the high-stakes world of trading. In this ever-evolving landscape, where fortunes ebb and flow with each market cycle, the guiding words of seasoned professionals serve as…
For swing and mean-reversion traders, tracking the price swings and spotting potential reversals is key to finding trade setups, and the Stochastic Momentum Index (SMI) can be a useful tool in this regard. What do you know about this indicator?…
The moving averages are one of the most used technical indicators in the market. However, there are many types of moving averages. Today we are going to be looking at the exponential moving average: 20 EMA trading strategy. The exponential…
There are some indicators you can easily combine to get the best out of the market. The moving average convergence divergence (MACD) and Bollinger Bands combination is one of the best synergic indicator combinations. You can use it to trade…
Is the stock market a zero-sum game? You frequently hear media refer to games and markets as zero-sum games. Yes, we define the stock market as a zero-sum game, both in the short and in the long term, although it…
This article argues why scalping is a waste of time. Why? Because you highly likely end up losing money. We don’t recommend scalping when trading. Scalping is hard and almost all scalpers end up losing. Scalping is a waste of…
The Internal Bar Strength indicator (IBS) has worked remarkably well for over two decades. We can only guess why, but the stock market has been highly mean-reverting during this period, and this has, of course, given the IBS a nice…
This article explains what a trading journal is, why it’s an essential tool for traders, how to create one, what to record, and how often to review your entries. We’ll also provide a free example of a trading journal for…
By combining Cryptocurrency Trading Strategies with a cool head and a bit of patience, you might ride the waves of cryptocurrency trading like a pro. So, buckle up, stay focused, and let’s look at crypto trading strategies! This article breaks…
Ed Seykota revolutionized trading by integrating technology with trend-following strategies. This article delves into how he transformed a $5,000 investment into $15 million, his core principles, and the legacy he left in the trading world. Key Takeaways The Ed Seykota…
Keltner Channel Trading Strategy (Keltner Bands) is a lesser-known sibling of the Bollinger Bands which are widely used and pretty famous. Despite being rather unknown, Keltner Bands are still included in most software packages. In this article, we take a…
Among the tools available for analyzing the markets, oscillators are some of the most interesting for tracking the momentum of individual price swings — one that seems to do a damn good job is the Pretty Good Oscillator (PGO). What…
The domain of breakout trading strategies opens doors to profit from possible changes in market trends. Breakouts are key indicators of trend shifts, providing traders with chances for financial gain. Our detailed guide will take you through multiple approaches enabling…
There are many indicators and tools for technical analysis, but only a few have leading properties like the Fibonacci tools, which is why Fibonacci trading is popular among traders. But how do you trade a Fibonacci trading strategy? A Fibonacci…
Mean reversion trading strategies involve identifying assets that have deviated significantly from their historical average price or valuation and then betting on their eventual return or “reversion” to that mean level. Traders using mean reversion trading strategies anticipate that prices…
Was Edward Thorp just a skilled mathematician, or did he revolutionize how we gamble and trade financial assets? Discover the man who not only conquered blackjack with his card counting system, but also shook Wall Street with his quantitative and…
The Valentine’s Day rally is an annual event in which stock prices tend to increase in anticipation of the romantic holiday. The rally has been studied extensively by investors and economists alike, with a variety of conclusions drawn from the…
Trend following trading strategies aim to profit from existing market trends. They identify trends using technical analysis tools, enter trades in the direction of the trend, and exit when signs of reversal appear. These strategies focus on momentum, use risk…
Given that the Super Bowl is such a big event for Americans, can we spot any seasonal trends before and after the event? Is the Super Bowl bullish or bearish for stocks and bonds? Is there a Super Bowl indicator?…
Trend following has many followers, for some investors and traders trend following is like a religion. But does trend following work? And if so, why does it work? Yes, trend following does work. If we look at history, even simple…
Gold Moving Average Strategy and Trend following systems work. Below we present a very simple trend following system in gold: In this article, we look at how you can use the 12-month (250-day) moving average to outperform the gold price. Gold…
George Washington’s Day/Presidents’ Day is a federal holiday in the US. But does it affect the US stock market? The US financial markets do not open on George Washington’s Day or Presidents’ Day. Trading does not take place on any…
The 200-day moving average trading strategy is frequently used as an indicator in the financial markets. Who hasn’t heard about the “Death Cross”, “support at the moving averages”, “the trend is positive because the price is above the averages”, etc.? …
The 9 EMA trading strategy is a widely used technical analysis indicator strategy among traders to identify short-term market trends. It involves the use of the 9-period exponential moving average to generate buy and sell signals. The strategy is easy…
The Ben Felix Model Portfolio, developed by Ben Felix and Cameron Passmore of PWL Capital, is a globally diversified investment strategy that utilizes index funds and tilts towards specific factors, such as Size, Value, and Profitability, for added potential returns….
Can you make money swing trading futures. Swing trading is a unique style of market speculation where positions are held beyond the trading day but not more than a few days or weeks. This style can be used to trade…
The January Barometer is a seasonal trading strategy that worked over many decades. While the traditional January Effect seems to be arbed away, the January Barometer has worked well for many decades. This is the January effect that works – the January…
The MACD and RSI strategy refers to a trading method that makes use of both indicators in analyzing and trading the markets. The combination of both momentum indicators may give more insight into what the market may do next and…
Today we want to delve into John Ehler’s Trading Strategy and an indicator created by this famous author to investigate financial instruments quantitatively. In August 2006, John Ehlers published an article in Stocks & Commodities titled Modeling The Market =…
In this article, we will discuss an indicator called SuperTrend, which has a very promising name. So, what is the Supertrend Indicator Trading Strategy exactly? The SuperTrend indicator is a type of trend following indicator that was created by trader…
In the world of technical analysis, the Relative Strength Index (RSI) is a widely used momentum oscillator that measures the speed and change of price movements. Larry Connors, a prominent trader and author, introduced a variation known as the Cumulative…
