In Chapter 6 of Larry Connors’ High Probability Trading, there is a trading strategy called Multiple Days Up (MDU) and Multiple Days Down (MDD). The books by Larry Connors, including High Probability Trading, are considered key resources for traders interested…
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:…
Whether candlestick patterns actually work depends heavily on how you define your entry and exit rules, as academic research shows mixed results ranging from no added value to statistically significant predictive power. While some candlestick patterns show a measurable historical…
The Short Interest Strategies. Is high short interest good or bad? Short interest in trading has been a hot topic during 2021 after Gamestop made short-sellers run for cover at prices many times higher than their entry price. But was…
This article presents an ETF rotation strategy. Sector rotation is popular, and this is not without merit. The idea is to be in the sector that shows the best recent momentum. Today we present an ETF momentum rotation trading strategy…
Williams %R was developed by the famous trader and tax rebellion Larry Williams, who has given names to several technical indicators. Last week we wrote about the WilliamsVixFix indicator, and today we are explaining the Williams %R trading strategy and…
When a stock is overbought, we can expect weaker returns than average over the next few days. But in the long term, returns gravitate toward the average returns. Thus, overbought stock markets only predict short-term results – not long-term. This…
With trading strategies, there are many different ways to trade and as many different types of trading strategies. It’s important to remember that what works well for one person might not yield the same results for you. Conducting thorough data analysis and data-driven backtesting,…
Are you looking to make profits from day trading strategies but feeling overwhelmed by the numerous strategies out there? You’re not alone. Day trading can be a complex and high-risk endeavor, requiring a blend of knowledge, discipline, and timely execution….
Bond trading strategies are a great inclusion in a portfolio of strategies because they offer diversification and, most likely, uncorrelated returns. Bonds are complementary. First, you might want to have a look at other articles related to bond trading strategies:…
We call the strategy an intraday momentum trading strategy. This is a type of short term trading strategy that seeks to capitalize on rapid intraday price movements in trading assets such as the S&P 500 ETF. By focusing on intraday…
In this article, we present you a Gold Momentum Trading Strategy, originally based on research by Cyril Dujava of Quantpedia, suggests that gold performs significantly better when its momentum aligns with that of other asset classes – specifically US Treasuries….
Golden Cross Trading Strategy is famous and a cited phenomenon in the media. In this article, we look at the performance of the Golden Cross in the S&P 500. A Golden Cross involves two moving averages – one short and…
When bonds go down and interest rates go up stocks perform poorly. A lower price for the bond means that the yield and interest rates go up, and future cash flows get discounted at a higher rate. When rates go…
The Triple RSI trading strategy is a modified version of the RSI strategy with four key variables, three of which are based on the RSI. It focuses on mean reversion, and the trading rules involve conditions related to RSI readings,…
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.? …
Random Walk Theory Trading Strategy means stock prices move randomly and can’t be predicted — like flipping a coin. Popularized by Burton Malkiel in A Random Walk Down Wall Street, the idea suggests that trying to time the market is…
The NR7 trading strategy is a narrow-range strategy that is both well-known and popular. The NR7 trading strategy was introduced by Toby Crabel in his 1990 book, ‘Day Trading with Short-Term Price Patterns and Opening Range Breakout.’ The strategy focuses…
(Source) It feels like a lifetime ago when Graphyte moved into real-time personalization engines in 2018, as AI-driven models were becoming a thing in iGaming. Almost a decade later, AI is no longer an add-on tool that gives industries a…
Friday the 13th has long been associated with bad luck, though the exact origin of the superstition is not known (to our knowledge). Those who grew up reading Donald Duck know the bad luck that happened on Friday the 13th….
What is the Choppiness Index? The Choppiness Index is an indicator created by an Australian commodity trader, Bill Dreiss, to show when a market is choppy or trending. A choppy market is one that is ranging or in a tight…
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 are not stock market open on George Washington’s Day or Presidents’ Day. Trading does not take place…
What are the Acceleration Bands? Acceleration Bands refer to a technical indicator plotted as an overlay on the price chart to show the direction of the trend and the momentum of the price action. Like the Bollinger Bands, the acceleration…
What is the Ease of Movement Indicator? The Ease of Movement (EMV) is a volume-based oscillator developed by Richard Arms that quantifies the relationship between price change and volume. It identifies the “path of least resistance”: a large price increase…
What is the True Strength Index Indicator? The True Strength Index (TSI) is a momentum indicator that is based on a double smoothing of price changes. It is an oscillator, swinging between limits of -100 and +100, with 0 as…
Understanding volume analysis is very necessary for successful trading, and one indicator you can use for such analysis is the Volume Rate of Change (VROC). Do you know about this indicator and how to use it? In trading, the Volume…
One thing about the financial trading world is that traders are always looking for more tools to analyze the markets, and one such emerging tool is the Relative Volatility Index (RVI). What do you know about this tool and how…
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?…
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…
Seasonality has long been used in trading and investing: the idea that certain patterns in market returns repeat at similar times each year. In his book Quantitative Investing: Strategies to Exploit Stock Market Anomalies for All Investors, Fred Piard explores…
In the trading world, there are many technical indicators to help you understand market trends and many more are being created — one such indicator is Polarized Fractal Efficiency (PFE). What do you know about this indicator? Polarized Fractal Efficiency…
Are you excited to learn the 17 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…
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 are not open on Presidents’ Day or George Washington’s Day. Trading does not take place on any…
Bond trading strategies are a great inclusion in a portfolio of strategies because they offer diversification and, most likely, uncorrelated returns. Bonds are complementary. First, you might want to have a look at other articles related to bond trading strategies:…
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…
Here’s an overview and list of 75 different types of candlestick patterns, categorized by their trading implications, along with trading rules and backtests: Therefore, the trader needs to know and understand up to 75 different types of candlesticks, as they…
You are going to learn 30 trading patterns with common types and strategies for elite traders in this article. This practical guide cuts through the complicated and detailed 30-trading patterns that smart traders use to read market trends and time…
What is the Relative Vigor Index (RVI) Indicator? The Relative Vigor Index (RVI) is a technical analysis indicator that measures price momentum by comparing the closing price to its trading range and using a simple moving average (SMA) to smooth…
The best Forex trading strategies focus on combining technical analysis with strict risk management, including trend trading, breakout, and range trading, tailored to specific timeframes like day trading or swing trading. Key approaches include following market trends, utilizing price action…
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…
According to historical backtesting since 2014, Monday is the best day to buy Bitcoin. Buying late Sunday and holding through Monday has historically delivered the highest average daily return of 0.51%. Jump to backtest. If you’ve ever asked yourself what…
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….
Key Summary: What is the Order Flow Trading Strategy?An order flow trading strategy is a method of trading that is based mainly on watching the flow of trading orders and the impact those have on the current price of an…
Below, you will find backtested and researched trading ideas and analysis for our 100 Trading Strategies for Sale. This little shop contains performance metrics, statistics, risks, historical performance, and figures. The historical performance and figures for strategies found in our…
Futures trading strategies often involve hedging against price movements to protect investments, utilizing contracts to buy or sell assets at predetermined prices in the future. Traders might also employ speculative strategies, aiming to profit from price changes by predicting market…
Correlation trading strategies are market-neutral trading approaches that exploit statistical relationships between financial instruments to profit from divergence or convergence in price movements. Correlation trading strategies revolve around exploiting statistical relationships between asset prices—how instruments like the S&P 500 and…
Today we are presenting 3 mean reversion strategies. They were partially published on this website a few years back, and today we make some minor adjustments and present their performance on different ETFs. Furthermore, we discuss why mean reversion works…
Few concepts are as enduring as momentum and trend following. A recent research paper titled “A Century of Profitable Industry Trends”, authored by Carlo Zarattini and Gary Antonacci, explores a systematic approach to capturing these trends over a 100-year horizon….
What is the best swing trading strategy? Is swing trading still profitable with positive returns? We have summarized 10 free swing trading strategies that might help you start your trading career. The internet is flooded with anecdotal evidence about how…
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…
This blog post explores fascinating new evidence from a research paper titled “From Red to Blue: The Long-Run Inversion of Political Cycles and Stock Market Returns Over 153 Years” by Han, Lu, Xu, and Zhou. The paper documents a fundamental…
There are several ways to smooth price data using the moving average technique, and one of the interesting averaging methods is the Modified Moving Average (MMA). What do you know about this MMA indicator? Also known as the Running Moving…
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 landscape of cryptocurrency arbitrage has undergone a fundamental transformation over the last five years. What was once a manual game of spotting price differences between exchanges has evolved into a high-stakes technological arms race dominated by quantitative strategies and…
With trading strategies, there are many different ways to trade and as many different types of trading strategies. It’s important to remember that what works well for one person might not yield the same results for you. Conducting thorough data analysis and data-driven backtesting,…
AI trading strategies use algorithms to analyze data and improve trading decisions. This enhances efficiency and accuracy in the stock market. In this article, we’ll explore top AI strategies and their real-world applications. Key Takeaways AI Trading Strategies (Methods, Key…
If you have come so far in your trading that you rely on backtesting to validate your trading strategies, you definitely are ahead of the masses. Most people haven’t understood that all strategies and patterns they want to trade need…
Seeking to invest smartly in the markets? Backtesting is your first step — a method to trial trading strategies with past market data before risking actual money. This article unpacks backtesting from A to Z, teaching you how to employ…
Amibroker is a popular software for algo traders and those who backtest. It’s inexpensive, fast, and offers all needed to improve your trading. We have been using Amibroker for many years, and absolutely all backtesting on this blog is coded…
When it comes to trading, you can either use mechanical trading strategies or discretionary trading strategies. What is the difference, and which is better? Let’s find out. Mechanical trading strategies refer to automated trading using trading algorithms with pre-set instructions….
How to enter and exit positions are important in trading – perhaps one of the most important aspects of trading. How do you enter and exit a trade? We all know commissions can eat into the profits, but slippage might…
Machine learning in trading strategies improves predictions and insights from data. In this article, discover how machine learning tools optimize stock trading, enhance predictions, manage risks, and ensure informed decisions. Key Takeaways Understanding Machine Learning in Trading Machine learning has…
This article looks at how to trade live and automated with Amibroker via Interactive Brokers. We have been using Amibroker for live automated trading for a few years, without any problems worth mentioning. Automatic trading with Amibroker and Interactive Brokers…
Are you looking for Amibroker trading strategies? Are you looking for Amibroker code to make profitable trading strategies? If so, we might have exactly what you are looking for! Since we started this website back in 2012, we have published…
Transitioning a trading strategy from a backtest to live trading often yields unexpected results. While backtesting provides insights, it can’t fully predict real-world performance. This article details what can you expect from a trading strategy backtest when you are trading…
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…
Quant trading works because it’s based on objective and backtested trading rules. We believe it is the correct way to approach short-term trading. Even better, we believe it potentially can work for anyone who is a keen learner – you…
Here is a Tradingview Pine Script Strategy. TradingView is a popular tool with many traders due to its vast array of tools and features. TradingView uses its native code language, Pine Script, to implement indicators and backtest trading strategies. Here…
Most traders test their trading ideas on all their available data and conclude “yes or no” to go live with the strategy. But it’s a major problem with this method: You test on known data – not unknown. Almost all…
Let’s see how to build a trading strategy based on the popular RSI indicator using TradingView (step by step) in the crypto market, from building the layout to implementing its native Pine Script language. Our RSI-based trading strategy will seek…
Tail risk is the risk of extreme losses that occur outside of the normal distribution of returns. It is also known as fat tail risk because the distribution of returns has a fatter tail than a normal distribution. Backtesting is…
There are 252 trading days per year for the U.S. stock market. The number may vary from year to year, as not every year has 252 trading days. For example, the 2020 trading year consists of 253 trading days, but…
Quantified trading strategies are strategies based on finding inefficiencies in financial markets based on numbers, math, data, and statistics. This is done by studying historical data from the past, mostly time series of the price of financial instruments, and the…
Can you buy stocks on the weekend? Trading stocks over the weekend can be a good opportunity for professional as well as part-time traders to brush up their skills while maximizing their returns. Yes, traders can trade stocks over the…
Survivorship bias in trading and backtesting is about the things we don’t see or to a certain degree ignore. We tend to see the winners and not the losers. Unfortunately, this is very typical in trading and backtesting. To avoid…
To succeed at trading, you must ensure you have a positive statistical expectancy and the ability to follow the strategy. What is statistical expectancy? Simply put, it’s the probability that your trading strategy will produce a profit over a large…
Trading Strategy Optimization, is it good for trading? Are optimizers error maximizes? Do small input errors result in large output errors? Stay tuned, and you’ll find out why trading strategy optimization is smart – when you know what you are…
In financial trading, as with most aspects of life, everything is getting automated, thanks to advances in artificial intelligence and machine learning. From vital signs in cardiology practice to price changes in the financial market, people are building systems that…
Curve fitting is when a strategy or edge is not fit to market behavior, but market noise, leading to failure in live trading. Curve fitting (overfitting) is overoptimization that is unlikely to fit into future unknown data. You have probably…
ChatGPT has been on everyone’s mind lately. People are discussing how it can improve productivity or help you solve programming bugs. But can ChatGPT be used for backtesting? ChatGPT can be helpful in trading as a tool for analyzing market…
Your strategy looks strong, the metrics are impressive, and the equity is sloping nicely upward. What is not to like? But think twice – here’s the uncomfortable truth: your backtest might still be worthless. Luck and randomness might fool you…
The phenomenon known as the overnight effect or overnight drift is a significant topic in quantitative finance, referring to the tendency of asset returns during non-trading hours to exhibit substantial patterns. This drift has been well-documented across numerous asset classes,…
Backtesting a futures strategy is one of those essential practices that can make the difference between consistent gains and unexpected losses in the fast-paced world of trading. Imagine having a roadmap that shows how your ideas would have played out…
Many people have a dream of having a computer that trades for them so that they don’t have to care for the order execution or anything else trading related. While no such trading exists, algorithmic trading comes very close, and…
Here we are presenting a lot of very interesting Day Trading Statistics that will probably shock or at least surprise a lot of readers. Day trading has witnessed a surge in popularity. The rise of internet trading platforms and social…
Seeking to invest smartly in the markets? Backtesting is your first step — a method to trial trading strategies with past market data before risking actual money. This article unpacks backtesting from A to Z, teaching you how to employ…
About 60-75 percent of overall trading volume in the U.S. equity market, European financial markets, and major Asian capital markets is generated through algorithmic trading, according to Select USA, in 2018. However, the overall trading volume of algorithmic trading in…
When it comes to the financial markets, there are many investment options to choose from, but experienced investors know that stocks are always the best investment in the long term. And here is why we think so. Stocks are considered…
Seeking to invest smartly in the markets? Backtesting is your first step — a method to trial trading strategies with past market data before risking actual money. This article unpacks backtesting from A to Z, teaching you how to employ…
Algorithmic trading might seem confusing and complicated at first sight. Many new traders find algorithmic trading hard to grasp, and therefore wonder if algorithmic trading does work. Yes, algorithmic trading does work. If you have a robust trading strategy that…
If you ever have wanted to have a computer that takes care of the trade execution for you, you have probably looked into algorithmic trading. Being used by many big trading firms, as well as retail traders, algorithmic trading is…
Have you ever wondered how to trade in financial markets using trading signals and an automated trading system? Without being influenced by emotions and biases, you can rely on metatrader and algorithmic trading software. Autotrading is the solution you’ve been…
Quant trading has both pros and cons. In this article, we look at 8 pros and cons of quant trading. Even though we list both 8 pros and cons of quant trading, we believe the pros far outweigh the cons….
Learning how to build an algorithmic trading strategy starts with defining rules for trades, coding those rules into a program, and rigorously testing the program. This guide will cover each step in detail, including the tools and skills you need…
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…
Automated trading strategies have revolutionized the financial markets by providing a systematic, emotion-free approach to maximizing profit potential. Whether you are looking to leverage high-frequency algorithms or simple trend-following rules, implementing the right automated system is essential for maintaining a…
Algo trading, or algorithmic trading, uses computer programs to automatically execute trades based on pre-set rules. Beginners can benefit from faster decisions, reduced emotions, and backtested strategies. Algorithmic trading has transformed how financial markets operate over the past two decades….
Algorithmic trading strategies today emphasize robust backtesting, strict rule definition, and parameter stability rather than curve-fit optimization. Modern systems combine mean reversion, momentum, and volatility filters to adapt to fragmented liquidity and faster execution environments. Reliable strategies define precise entry…
Backtesting AI trading strategies involves using historical market data to evaluate how your trading algorithms would have performed. This helps traders identify their strategies’ strengths and weaknesses before they invest real money. In this article, you’ll learn about setting up…
Monte Carlo simulation in trading and investing is a tool frequently used in blogs and backtests. Can Monte Carlo backtesting be used to measure risk and uncertainty? Yes, it turns out you can use it in the financial markets: Monte…
