The Relative Strength Index (RSI) is a staple in technical analysis, often used to spot oversold conditions. When RSI dips to 30 or below, many traders see it as a potential buy signal, expecting a price reversal. But is this…
Earnings seasons, the quarterly periods when companies release financial results, are known for sparking market volatility. Occurring in January, April, July, and October, these seasons are closely watched by investors aiming to capitalize on price movements. But can these periods…
Some traders believe they can use the phases of the moon cycle (lunar cycles), such as the full moon, to time the market and make profitable trading decisions. This has given rise to the Full Moon/Moon Phases/Lunar Cycles Trading Strategies….
Weekly RSI vs daily RSI – what is best? This is a bit like comparing apples to oranges. It might be the same indicator, but RSI can deliver substantially different risk and reward payoffs in different time frames. Risk and…
Investing is as much about psychology as it is about numbers. Fear and greed, two fundamental human emotions, significantly influence market dynamics. Fear can lead to panic selling during market downturns, causing sharp declines, while greed can drive speculative bubbles,…
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…
In today’s data-driven world, investors are turning to unconventional tools like Google Trends to gain an edge in the stock market. Google Trends tracks the popularity of search terms over time, offering a window into public interest and investor sentiment….
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…
This article note provides a comprehensive examination of whether a coin toss can beat Wall Street’s top investors, drawing on a range of studies, experiments, and financial theories. Background and Context The question of whether random strategies, such as a…
The question of whether a monkey picking stocks could outperform a hedge fund manager is a fascinating thought experiment often used to highlight the challenges of beating the market. It seems likely that, on average, random stock selection could indeed…
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…
As U.S. presidential elections approach, investors often wonder how the stock market, particularly the S&P 500, will perform. Election years bring political uncertainty, campaign promises, and economic shifts, all of which can influence market trends. So, what are the odds…
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 S&P 500, or Standard & Poor’s 500, is a market-capitalization-weighted index comprising 500 leading publicly traded companies in the United States. Launched in 1957, it covers approximately 80% of the total market capitalization of U.S. equities and is widely…
The S&P 500, a benchmark index tracking approximately 500 large U.S. companies, is often viewed as a proxy for the broader stock market’s performance. Investors frequently compare its returns to “cash,” typically represented by short-term, low-risk investments like 3-month Treasury…
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…
Mondays often feel like a drag. After a relaxing weekend, traders might dread the market open, blaming bad trades on the “Monday blues.” But is this just a feeling, or do the markets actually underperform on Mondays? To find out,…
The S&P 500 is often hailed as the gold standard for gauging stock market success, but how well does it protect your wealth against the relentless creep of inflation? Spoiler alert: It’s a strong contender, beating inflation about 75% of…
When the stock market closes on Friday, many traders and investors assume their portfolios are on hold until Monday. But are weekends secretly impacting your returns? New data reveals how the S&P 500, long-term Treasury bonds, and Bitcoin perform over…
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…
Victor Niederhoffer, once a collaborator with George Soros, is famed for upending traditional finance with his statistical approach to markets. His career is a case study in resilience, marked by radical comebacks from market upheavals. What are the principles that…
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…
Could the S&P 500 be in a bear market without you noticing? It’s a question that might make any investor pause. In this article, we’ll explore the probability of a stealth bear market using the 200-day moving average as our…
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…
Imagine this: the RSI just hit 70. The charts are screaming ‘overbought,’ and everyone’s asking the same question: What happens next? Is it time to sell, hold, or double down? We have crunched the numbers and backtested the data on…
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…
The S&P 500 is a cornerstone of the U.S. stock market, tracking 500 of the nation’s largest companies. For investors, it’s a key indicator of economic health—but it’s not without its wild swings. A common question arises: how often does…
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 crashes, it feels like the world is ending. Your portfolio’s in tatters, the news is a wall of gloom, and all you can think is: How long will it take to get back to normal? How…
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…
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…
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…
Trend trading and Mean reversion trading could rightfully be said to be the two biggest and most popular trading styles out there. And while both are used extensively, they capitalize on very different market behavior. Trend following and mean reversion…
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…
Why do stock market prices rise and fall? Your search for clarity ends here, because the stock market is influenced by a zillion factors (unfortunately). However, there are a few important factors that you need to understand, and we cover…
Opening range breakout trading strategies (ORB) are popular strategies, perhaps because of Tony Crabel’s classical trading book published in 1990: Day trading With Short Term Price Patterns And Opening Range Breakout. 31 years after it was published, we still see…
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…
European Futures Trading offer diverse trading opportunities and are governed by solid regulatory frameworks. This article explains how these markets work, introduces major exchanges like Eurex and Euronext, and highlights popular futures contracts. You’ll also learn about key trading strategies…
In early March 2025, President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve, positioning the United States to maintain a significant stockpile of Bitcoin. This initiative aims to bolster the nation’s economic resilience and assert its leadership…
Cryptocurrency trading is thrilling. One moment, you’re seeing double-digit gains, and the next, the market wipes out weeks of progress in minutes. It’s a financial rollercoaster—exciting, fast-paced, and full of opportunity. But it’s also brutal if you don’t have a…
Understanding Web3 Security Web3 has changed digital interactions, moving from centralized platforms to decentralized networks powered by blockchain technology. While decentralization gives users more control, it also introduces security risks that need constant evaluation. Unlike traditional cybersecurity models, Web3 security…
Cryptocurrencies have become a major talking point in recent years, and the numbers suggest that their popularity is far from a passing trend. As of late 2024, a report from the Federal Reserve indicated that roughly 12% of adults in…
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…
Automated trading strategies have transformed how traders approach the markets, offering a structured method of decision-making and the potential to increase profits via the leverage of automation. If you’re seeking clarity on which strategies could increase your trading and how…
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…
Psychological biases can significantly impact decision-making in both investing and gambling. By recognizing these biases, individuals can mitigate their effects and make more rational choices. Understanding these common pitfalls helps navigate high-risk environments with greater confidence. In the realms of…
Markets are anything but random. They follow cycles—predictable in hindsight but often elusive in real time. Understanding these patterns isn’t just a theoretical exercise; it’s the foundation of successful trading. At any given moment, markets are either booming, crashing, or…
Candlesticks are popular. They are very useful for visual displays, but our previous backtests indicate candlesticks might be useful to make trading strategies as well. In this article, we look at what is the best time frame for candlesticks: The…
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,…
2024 was an eventful year across the board. The London Stock Exchange saw nearly 90 firms depart. Gold outperformed the S&P 500 rising nearly 30%, and silver wasn’t too far behind. Bitcoin had a relatively modest year, by its standards,…
