The One White Soldier is a bullish reversal candlestick pattern that typically occurs at the end of a downtrend. It consists of a single white candle that opens below the closing price of the previous day and closes above the…
For a long time, there has been debate about whether a classic investment portfolio should add cryptocurrencies. The debate gained traction when famous institutional investors secured a stake of their capital in Bitcoin. Should Bitcoin be a part of your…
The Bearish Engulfing candlestick is a technical analysis tool used by traders to identify potential trend reversals from an uptrend to a downtrend. While the Bearish Engulfing pattern does not guarantee a trend reversal, it can help identify potential entry…
The Inverted Hammer candlestick pattern, also known as the inverted hammer candlestick formation, is a bullish reversal that forms at the bottom of downtrends. As the name implies, it has the appearance of an inverted hammer — a small body…
The candlestick chart is very popular among traders — not just because it is easy to visualize but also because the candlesticks can form shapes and patterns that traders can use to predict how the price might move in the…
In markets with high volatility, the price may spike widely in a trading session and end up closing where it opened, giving rise to uncommon candlestick patterns, such as the Long-Legged Doji. As with many other candlestick patterns, this pattern…
The Bearish Belt Hold candlestick pattern is one that has been around for a while. It’s not one of the common ones, but it still has a sizeable number of fans among candlestick pattern traders. A Bearish Belt Hold is…
Candlestick charts are instrumental in identifying potential changes in short-term trends, which can be signals for potential trading opportunities. Among the various candlestick patterns, the matching high pattern is very unique. Want to learn about the matching high candlestick pattern?…
The Bearish Harami is a candlestick pattern comprising of a small bearish candlestick forming within the body of a previous, sizeable bullish candlestick. Many traders rely on this pattern to predict potential reversals to the downtrend. The Bearish Harami candlestick…
Candlestick charts are often used to analyze price action because of the patterns that signal potential trend reversals and provide some trading opportunities. Among the various candlestick patterns, the One Black Crow pattern is considered highly reliable. Are you interested…
The largest economy in Latin America, Brazil has a well-established financial market and is the top investment destination in South America. The country has some of the biggest stock and commodity exchanges in the continent, providing opportunities for day trading…
The Euro is the European Union’s currency and is represented with the € symbol. Since the introduction of the currency in 1999, the Euro FX futures has grown to become one of the most actively traded contracts in FX futures,…
Because of its potential for quick profits, the short-term trading strategy is the most popular trading method among retail traders. Unlike traditional long-term investing methods, this strategy offers an exciting opportunity to profit from relatively minor changes in market conditions….
Many patterns or models try to predict what the performance of the market may be in any given year. For example, the January effect, presidential cycles, valuation models, etc. Today we will look at one that many traders do not…
A small account trading strategy refers to the trading methods and risk management approach a trader can apply to grow a relatively small account. Starting trading with a small account means having to use leverage and making fewer trades. Thus,…
Stocks can be classified into many types: value vs. growth, profitability vs. investment, developed vs. developing countries, and, of course, large vs. small caps. Today, we present a large cap vs small cap rotation trading strategy. The large-cap vs. small-cap…
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 many indicators or patterns that try to predict whether the stock market is going to crash or rise. Today we will be looking at one that generated few signals over the years, but anticipated major bear markets. It’s…
The Relative Strength Index indicator is popular, for a reason, but in this article, I backtested the default settings of the RSI indicator, and made it better. Investments and trading is a wonderful world where large companies and small investors…
Equal weight and market weight are two different methods to build an index. The S&P 500 is famously a market-weighted index, like most stock indices. But the question that pops up is: Which type of market weighting performs best –…
The micro E-mini Nasdaq 100 futures strategy is the method or technique that you can use to trade the micro E-mini Nasdaq 100 futures profitably. Micro E-mini Nasdaq 100 futures are a type of electronically traded Nasdaq 100 futures that…
Are you excited to learn the 15 Key Mindset Traits of Successful Traders in Trading Psychology? In this article, we explore the mental framework that empowers you to confront market volatility with confidence. Unpack the traits that forge a winning…
There are many chart patterns price action traders use to analyze and anticipate price movements. Being a new entrant in the chart pattern catalog, the Quasimodo chart pattern may not be one of the most popular, but it could be…
There are different ways to skin a cat, they say. This is true in trading as well. While some find their edge in the market with the help of trading indicators, others trade the price action, and the rabbit trail…
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…
The Gold Stocks Strategy, revolving around GDX (Gold Miners), suggests buying if GDX rises by more than 0.1% from open to close and selling short if it rises similarly the day before. With results showcasing profits of 273.27% and 185.97%…
What can we learn from the habits of rich and wealthy traders (rich people trading strategies)? In the March 2012 issue of Trader’s Magazine, there is an article on page 6 by Tim Bourquin. He has interviewed many profitable traders….
It’s easy to fool yourself in the stock market, especially in trading. The famous scientist Richard Feynman once said that the first principle is that you must not fool yourself, and you are the easiest person to fool. Trading involves…
Adaptive moving average strategy backtest (Kaufman’s adaptive moving average) We know that traditional moving averages smoothen price series to reduce noise and show the trend. However, when price makes a temporary but significant leap, it can still give the appearance…
How I Trade For A Living by Gary Smith was (and still is) a popular trading book. We bought the book just days after it was published in 1999, in the midst of the dot com frenzy, and we have…
RSI is mostly used as a reversal or contrarian indicator. In most stock markets, this has worked really well over the last 30 years. But what if we flip it and use it as a momentum indicator instead to make…
How to overcome fear of loss in trading is for many a huge obstacle that is hard to overcome. Fear in moderate doses is healthy, but it might also limit your trading if fear overtakes control of your decisions. Fear…
Yes, you can get rich from quant trading, but many factors must go your way. Quant trading is challenging, just like any new business startup. Most quant traders fail. Competition is stiff, and you need to know your place in…
Is it possible to use the ADX indicator (Average Directional Movement Index) (DMI) to find a profitable ADX trading strategy? This article looks at the ADX indicator where we make some historical backtest to evaluate and analyze. The adx indicator…
Can we make a profitable MACD trading strategy with the help of the MACD indicator and the MACD histogram? This article examines the MACD indicator and its use to create a MACD trading strategy. It explains what the indicator is…
Trading offers a very scalable career, while investing offers lower risk and less scale. Short-term trading requires excellence, while long-term investing only requires average abilities to succeed. What is best for you depends ultimately on your goals and personality. Trading…
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,…
It would be best if you built a portfolio of trading strategies that differ in markets, time frames, and types. Why? Because you want to have a portfolio of trading strategies that both complement each other and make the portfolio…
The arithmetic vs geometric averages can be difficult to grasp. Albert Einstein is famous for saying that compounding is the eighth wonder. But what if he is wrong? Perhaps multiplicative compounding is the most destructive force in the universe? The…
Why trade the DAX index and a DAX trading strategy? The DAX index is the main equity index in Germany. It’s one of the most popular trading vehicles in the whole world and has a tremendous daily volume. Because of…
The best indicator for swing trading is Williams’s %R. It is one of the least known or used indicators but definitely one of the best swing trading. We tesed six indicators and based our conclusions not necessarily on the highest…
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…
As an investor, you would want to know whether your investment’s return is worth the risk. There are different methods you can use to measure the risk-adjusted performance of your portfolio, and the Jensen Ratio (Jensen’s Performance Index) is one…
Smoothed moving average (Wilder’s) strategy backtest The smoothed moving average is not as common as other moving average indicators, but you will come across it in your trading journey. So, it’s good to know what it means. Can a smoother…
I was recommended by my partner Hakan to read Pit Bull by Marty Schwartz when we were on a two-month proprietary trading course in Phoenix, Arizona, back in 2003. Pit Bull is entertaining, a relatively quick read, and perfect for…
The Death Cross in trading is a widely cited phenomenon in the financial media. As of writing, the media is full of stories about the price of Bitcoin being close to the Death Cross. In this article, we look at…
In 2009 Atul Gawande, a professor of surgery, published a book called The Checklist Manifesto – How To Get Things Right. The book is a good read and is relevant for most professions, not to mention what we do in…
Penny stocks offer a low entry and often the lure of striking it big. The internet is full of stories about how you can make millions and gain thousands of percent of returns in penny stocks. Is it any reality…
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…
We rank Williams %R as the best oscillating indicator for trading strategies. It’s certainly not the most known nor the most used, but in our humble opinion, our backtests proved Williams %R to be the most stable indicator for almost…
A reader recently asked if we use Heikin Ashi Candlestick in our trading. So what exactly is Heikin Ashi? In this article, we will reconsider the price representation called Heikin-Ashi, and try to get something good out of the charting…
Why day traders fail boils down to at least 16 reasons. This article explains why day traders fail and what you can do to survive and perhaps even prosper. Why day traders fail is mainly because they don’t understand the…
Today we will introduce you to a well-known stock market anomaly – the small-cap effect strategy. Small-cap stocks are one of the types/factors you can invest in and hold in your securities portfolio. Small-cap stocks differ from large- and mid-cap…
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…
Trading indicators generally work best when combined rather than being used individually. However, in this case, we will introduce an indicator designed to function as a comprehensive trading system on its own: Traders Dynamic Index trading strategy. The Traders Dynamic…
Most of the technical indicators that traders use nowadays we developed back in the 70, ’80s, and ’90s. However, the indicator we are going to introduce to you today was created not so long ago, in 2010. It’s called the…
Volume Profile is a trading indicator that displays the volume traded at different price levels over a specified period of time. It provides valuable insights into the distribution of volume across different price levels, helping traders understand the levels where…
Nikkei 225 futures, which is based on the Nikkei 225 stock market average, provide investors around the globe with an efficient way to access the opportunities of the Japanese equity market, one of the world’s largest markets. Created in 1950,…
Out of the hundreds or thousands of technical indicators and oscillators that exist, the Klinger oscillator indicator is not one that comes to mind first. However, because it is not well known doesn’t mean it doesn’t work or that we…
This article presents a stock trading system that only trades stocks. It has beaten buy&hold and (10.4% vs 7.5%) with a much lower drawdown. This is the equity curve and the complete trading rules are presented further down in the…
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…
The Yen is Japan’s official currency, denoted by the symbol, ¥, or the letters, JP or JPY. Regarded as a mainstay of global finance, the Japanese yen futures is one of the most actively traded FX futures. In fact, the…
Volume indicators in trading are tools used by traders and analysts to assess the trading activity or volume of a financial instrument, such as stocks, commodities, or cryptocurrencies. These indicators help traders gain insights into the strength or weakness of…
Here are 20 soft commodities trading strategies you are going to learn. For those trading soft commodities like sugar, cotton, and coffee, a strategic edge is key. This article explores effective soft commodities trading strategies, offering insight into market analysis,…
The Relative Strength Indicator, abbreviated RSI, is probably the most popular trading indicator. It’s mentioned in almost endless posts and articles on the internet. To our knowledge, the standard default setting of 14 days is mostly used. But does the…
Spin-offs are a popular corporate action that company management and boards may pursue to unlock value or narrow down their focus. Many famous investors, such as Joel Greenblatt, Seth Klarman, and Charlie Munger, have voiced their support for spin-offs as…
Cryptocurrency trading has become increasingly popular in recent years, and Bitcoin, as the pioneer and most widely recognized digital currency, is at the forefront of this seemingly financial revolution. Traders are constantly seeking strategies to capitalize on the volatility of…
Mean reversion strategies come with their own set of advantages and disadvantages relative to trend-following strategies. However, just as when implementing a trend-following strategy, knowing the statistical behavior of your asset is of vital importance when it comes to mean…
We already discussed how to create and backtest a trading strategy using Chat GPT in a prior article and video, but today we are going to skip the idea generation stage and jump right into the trading rules and backtest:…
With the world getting increasingly connected online and many regions opening up their financial markets to the global investing community, it is now easier to diversify your investment portfolio into other economies. And the European market is an easy choice…
Burton Gordon Malkiel in his famous book — A Random Walk Down Wall Street — popularized the random walk model of the financial markets. According to him, the market moves randomly and its direction cannot be predicted with technical or…
If all chart patterns are as simple as the rectangle pattern, every technical trader would be a chartist of some sort. One of the most popular chart patterns every trader should know, the pattern is easy to spot. But what…
Most traders attach trendlines across one swing side of a trend to delineate its direction. But to appreciate the individual price swings within a trend, you may need to have a price channel to see the up-and-down swinging movement of…
A pullback trading strategy is a trading strategy that involves buying a stock after it has experienced a recent decline in price. The rationale behind this strategy is that the stock is likely to rebound from its recent decline and…
There are many momentum and trend indicators out there, but the Qstick indicator is not one that shows up very often. What is the Qstick indicator? The Qstick indicator is a technical indicator that consists of two moving averages and…
In the world of finance, Commodities Futures Trading Strategies offer immense opportunities for investors to profit from price fluctuations in various commodities such as oil, gold, wheat, and more. However, to succeed in this dynamic market, it is crucial to…
Zweig Breadth Thrust Indicator is a market breadth indicator that helps you understand the internal strength of the market, at least that’s what the theory says. There are many breadth indicators – among them the Zweig Breadth Thrust Indicator (one…
Most price charts are time-based in the sense that a price bar represents price movement over a specified period of time. However, there are other chart types that are not based on time but, rather, on a specified price movement…
Among global government bond markets, the US government bond market provides the most liquidity, security (in terms of creditworthiness), and diversity. Being an important benchmark against which other long-term securities are measured, the 30-year bond has long been a favorite…
Launched on 24 November 1969, the Hang Seng Index (HSI) measures the performance of the Hong Kong Stock Market’s 50 largest companies. Representing about 50% of the value of the stocks quoted on the Hog Kong Stock Exchange, Hang Seng…
Interest rate trading strategy involves buying or selling financial assets, such as bonds, stocks, and Forex to profit from changes in the benchmark interest rate. The goal of the strategy is to make money from fluctuations in these instruments’ values…
TradingView is a financial platform that offers tools for traders to visualize market data, create and share technical analysis, and develop and backtest trading strategies. The platform offers a variety of tools including charting, indicators, drawing tools, and alerts. It…
The advent of electronic trading and the high-frequency trading bot that follows it meant that the financial markets have become too efficient to successfully trade them with discretionary methods. This is why algorithmic trading has been on the rise among…
While there are many different indicators used in technical analysis, only a few are deeply rooted in how price action is formed and how institutions, smart money, algorithms, and retail traders combined can give us a hint of how the…
Launched by the Chicago Mercantile Exchange (CME) in 1981, the Eurodollar futures was the first cash-settled futures contract and has been one of the most liquid futures contracts in the world. It has a staggering underlying market and a large…
One interesting thing about technical analysis is that there are many tools you can use to analyze the market. One of the most powerful and versatile but underutilized tools in trading is the trendline. You can use it to do…
While trading price bar patterns may not be a robust trading approach, within the right chart context, it is possible to create robust signals. This is true for the outside day price pattern, which is quite popular among price action…
5-Year T-Note futures strategy is the methodology or technique you can use to profitably trade the T-Note futures market, and this often includes technical and fundamental analyses. 5-Year T-Note futures are financial derivative products that represent a contract to exchange…
