August 2021 marked my 20-year anniversary as a full-time investor (day trading 2001-18), and I have learned a few trading lessons. I started trading when I was laid off after the dot-com bubble and dumped by my girlfriend. I thought…
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 Are Market Regimes in Financial Markets and Why They Matter for Trading Market regimes are broad patterns or phases of market behavior (for example, periods of high or low volatility) that persist for some time. They reflect underlying macro…
Proprietary trading – pros and cons – advantages and disadvantages There are both pros and cons to being a proprietary trader. Proprietary trading might not be so different than retail trading and you can mostly trade proprietary trading strategies as…
This article looks at the world of trading, uncovering trading statistics, truths, facts, and realities that shed light on many things you probably didn’t know about trading in stocks, futures, ETFs, and crypto. But first some key takeaways. Key Takeaways: Trading…
In a recent research paper titled “Returns to Constant Leverage Strategies: General Principles and Application to Levered Single-Stock ETFs,” Professor Hendrik Bessembinder of Arizona State University provides a deep dive into the mechanics and risks of the rapidly growing levered…
Few market forecasting tools have sparked as much fascination—and controversy—as the Benner Cycle. Developed more than a century ago, the Benner Cycle claims to identify recurring patterns in market tops, bottoms, and periods of economic stress. Despite its age, it…
In systematic trading, the assumption that a signal computed at the market close should be executed at the next day’s open is widespread. For many strategies with holding periods measured in weeks or months, this workflow is acceptable. However, for…
The relationship between gold mining shares and gold bullion is often misunderstood. While gold miners move with gold prices because their revenue depends on the price of gold, they exhibit a clear long-term underperformance compared to the physical metal. We…
In an age dominated by machine learning, high-frequency trading (HFT), AI, and complex black box models, it’s easy to believe that only the most sophisticated strategies have any edge left. But it’s not! If simple can succeed, why complicate things?…
Do you sometimes wonder what separates successful traders from the 90% who fail? The answer isn’t better market predictions or secret indicators – it’s understanding the mathematics behind trading success. Most retail traders approach markets trying to predict where prices…
Quantitative trading is the practice of using mathematical models and algorithms to execute trades in financial markets. This method relies on data-driven decisions, harnessing the power of advanced mathematics and technology to identify profitable trading opportunities. Traders often ask, “What…
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…
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. …
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…
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…
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…
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…
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…
Linear vs logarithmic charts and scale is important to understand because the difference between linear and logarithmic charts might be huge – the bigger the scale the more it matters. The difference between a linear chart and a log scale…
To create a profitable trading plan, you must define a structured framework that removes emotion from your decision-making. Follow these essential steps: A trading plan is crucial if you are looking to trade with purpose and control. It helps you…
Game theory in trading helps traders anticipate how others in the market will act. It’s like predicting moves in a game—by thinking about what other traders might do, you can adjust your strategy to gain an advantage. Traders use game…
Quantitative trading, which began in the early 20th century, uses mathematical models and computer algorithms to execute trades. Over time, this approach has evolved into a sophisticated practice that drives modern financial markets. This article delves into the history of…
Fundamental analysis is a key method for evaluating a stock’s true value. By looking at financial health and market conditions, investors can make smarter decisions. This article will guide you through the essential concepts, strategies, and practical tips for effective…
The Whaley Breadth Thrust is a momentum-based technical indicator used by traders and investors to gauge the strength of the market. Named after Wayne Whaley, a renowned market analyst, it attempts to capture the beginning of a major bullish move…
Imagine you’re a trader, sitting at your desk, staring at your computer screen, waiting for the perfect opportunity to strike. You’ve been watching the market closely, analyzing every tick, every trend, every pattern. Suddenly, you notice something unusual. The stock…
When it comes to navigating the complexities of financial markets, one timeless truth stands out: “Statistics don’t care about opinions.” In the dynamic world of trading, opinions can be as diverse as the market itself. Every investor has a unique…
Yes, the SPY (SPDR S&P 500 ETF) tends to closely follow the movements of the ES (E-mini S&P 500 futures contract). The ES futures contract is based on the S&P 500 index and is a popular instrument for trading the…
How do you start making money online in trading? It’s a question that looms large for anyone looking to tap into digital markets. Our guide demystifies the process, presenting practical steps and cautionary advice with real-world applicability. From selecting the…
Can trading as a side hustle be a viable option without derailing your day job? Absolutely. This compact guide offers straight-to-the-point strategies and essential tips for those looking to trade in tandem with their 9-to-5. Get insights on skill building,…
Navigating the intricacies of financial markets hinges on understanding market microstructure. This foundational knowledge can mean the difference between successful trading and missed opportunities. With a focus on the key aspects of liquidity, price discovery, and transaction costs, our guide…
Are you considering a shift to mechanical trading to remove emotional biases from your trading decisions? Mechanical trading systems are structured to help traders execute trades based on precise, pre-set rules rather than gut feeling or speculation. These systems aim…
Weather trading strategies have gained increasing attention in the financial markets due to their unique characteristics and potential for profitability. In this article, we will delve into the world of weather-based trading and explore the various strategies and techniques that…
Ever wondered how a beginner trader evolves into a market maestro? ‘Trading stories’ are not just about profits; they illuminate the strategic decisions and mental grit required for success. Dive into this collection that strips back the curtain on the…
Runaway gaps are not just arbitrary voids on a chart; they are pivotal in trend analysis for any trader. Promptly spotting and accurately interpreting runaway gaps, also known as the “runaway gap,” can mean the difference between riding a trend…
Curious about discretionary trading? This method depends on individual decision-making capabilities, setting it apart from algorithm-driven systematic trading. Our guide will unpack the skills, risk management strategies, and market analyses that depends on successful discretionary trading, offering you a clear…
An exhaustion gap can signal an upcoming trend reversal, but recognizing and acting on this shift is where the challenge lies. This article slices straight to the heart of exhaustion gaps, explaining their significance in market movement and might provide…
A trading system is your blueprint for market success; it’s a rule-based approach to automate your trading decisions and potentially enhance your market performance. This article explains how trading systems work, guides you in creating one tailored to your needs…
Program trading is a pivotal force in stock markets, using algorithms to execute trades based on predefined criteria. This article explores the core of program trading: its automated strategies, crucial benefits, and potential risks. Whether it controls liquidity or influences…
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…
Gap types in trading refer to the patterns formed when there is a significant difference between the closing price of one trading session and the opening price of the next. These gaps can provide valuable insights into market sentiment and…
In technical analysis, a breakaway gap is a significant price jump through support or resistance levels, indicating the potential start of a new trend. Are you wondering what a breakaway gap is in the stock market and how to identify…
Are you contemplating the merits of discretionary vs systematic trading and trying to discern which aligns with your investment philosophy? The heart of the debate lies in moving beyond gut-driven calls of a discretionary trader versus the rule-based discipline of…
Navigating the markets is treacherous when bear traps lurk, as they can snare traders with an unexpected uptrend in a declining market. Our focus here is bear trap trading – what it is, how to spot it, and ways to…
What is systematic trading and how does it streamline the decision-making process in finance? With its roots in algorithm-based trading rules, systematic trading minimizes emotional bias, ensuring a level of consistency often sought but seldom achieved in market trading. This…
The closest thing to a holy grail in trading is diversification. There is no holy grail trading strategy or strategies, but consistency can be achieved via non-correlated strategies. This is not a simple process but requires hard work plus delayed…
Understanding paper trading vs live trading is important to becoming a successful trader. Our comprehensive guide carefully compares these two methods, highlighting key distinctions such as paper trading’s lack of real financial risk versus the genuine emotional trials and possible…
If you’re looking to validate your trading strategies, historical data backtesting is indispensable. By analyzing how your strategies would have fared in previous market conditions, you can refine them without facing financial risk. This article unpacks the essentials of backtesting,…
Wondering how to capitalize on the movements of market giants? Order block trading is your answer. These crucial market territories, carved out by hefty institutional orders, can dictate the ebb and flow of prices. Recognizing and using order blocks properly…
Merger arbitrage is a nuanced investment strategy that aims to profit from the price discrepancies of companies during a merger. This article unpacks the technique, explores the risks, and guides you through the complexities, equipping you with the knowledge to…
Market neutral trading is an investment strategy designed to generate profits regardless of market direction. It involves balancing long and short positions to neutralize market risk and focuses on exploiting pricing inefficiencies for consistent returns. In this article, we’ll explore…
Index arbitrage is about smartly navigating price differences between stock indexes and their constituent stocks for a profit. Straightforward and efficient, this primer unpacks how traders use index arbitrage techniques to capitalize on market inefficiencies, provides insights into the risks…
Only a few people succeed at trading, and those who do, take a long time to learn their craft. As with every other profession, it takes time to understand the different elements of trading. Why Do People Think Trading Is…
We have updated our swing trading course. Check it out here: BUY NOW What does our Swing Trading Course cover? The course has the following lessons: When signing up you get an automatic e-mail that contains the URL and you…
Are you considering leveraging your investment strategy with margin trading? Margin trading is a method that allows traders to amplify their buying power by borrowing funds from a broker. With this approach, you can potentially increase your profits, but it’s…
Index trading allows investors to trade on the performance of a whole market or sector rather than individual stocks. This introduction to index trading breaks down the essentials of index tracking, simplifies the complexities of taking positions, and outlines trading…
What percentage of CFD traders lose money? Our informal survey suggests that between 62% and 82% of all retail CFD traders lose money. The best CFD broker has “only” 62% losing traders, while the worst has 82%. These are pretty…
Trading rules are the heart of a mechanical or algorithmic trader. This article helps you understand the importance of specific trading rules, making you better prepared to face the markets. It’s a trading GPS! We have made plenty of trading…
When it comes to the major U.S. stock indexes, the S&P 500 index is widely regarded as a barometer of the overall stock market’s performance. Seen as an indicator of how large corporations are performing, it consists of the top…
What is backwardation? Backwardation is a futures market condition where near-term contract prices exceed those for distant contracts, suggesting supply shortages. Derivatives are complex and hard to understand. However, they offer many benefits to those who understand them. Forward contracts…
Derivatives are complex financial products that offer a wide range of benefits to those who understand how to trade them and do trade them. Both the flexible forward contracts and their standardized alternatives — futures contracts — provide investors with…
We have covered the holiday seasons in many articles. In the stock market, these offer great trading opportunities. Buy and sell orders are backtested using the closing price (how to trade at the close – or alternative entries). No commissions…
Trading probability and the odds of a winning trade (calculator) can change the life and experience of a trader. Are your trading strategies backed by probability, or are you leaving success to chance? Understanding and applying trading probability is essential…
Trading Success hinges on skill, not chance. This article demystifies the exact methods behind successful traders’ consistency in profits. We’ll focus on the crucial strategies—from developing a winning mindset and risk management to adapting to market dynamics—that enable sustained trading…
Struggling with trades that miss the mark? Successful trading hinges on dodging a set of elusive pitfalls. This article dives into real trading failures that lead to losses and equips you with targeted strategies essential for market success. Navigate the…
On our single strategy page (which is also updated recently), we offer three strategy bundles. Bundle 1, three strategies in SPY/ES, has been updated with data until mid-January 2023. The price for the bundle is an inexpensive 299 USD. Performance…
Looking to understand equity trading? Active investing means buying and selling public company shares to profit from price movements. This article is your practical guide, explaining traders’ strategies and tips to make money in the stock market. Learn how to…
When it comes to trading accidents, the question on every investor’s mind is: what went wrong and how can I avoid the same pitfalls? Trading accidents, marked by their abrupt disruption to financial markets, have occurred periodically throughout history, reshaping…
You are going to learn about crude oil trading and 9 ways to trade energy market to secure maximum profits. If you’re aiming to begin trading or refine your strategies, this article discloses various methods used in trading crude oil,…
You are going to learn about Congress stock trading, which is the ultimate insider’s game for any trader. This article cuts through the noise to provide a factual understanding of congressional stock trading, set against the backdrop of urgent calls…
How does AI for stock trading give you an edge? In this article, we will understand the role of AI in analysing market data, executing trades, and getting better at decision-making processes. Learn the complexities of AI’s impact on stock…
For those who follow social media, you might be aware of the following ratio that has been much discussed lately: Nasdaq100 and Bonds. QQQ/TLT This is the ticker code of the ETFs of Nasdaq 100 (QQQ) and 20(+)-year Treasury Bonds…
Leverage trading is a technique in financial markets where traders get their market exposure by employing borrowed funds or margins to capitalize on small price fluctuations, potentially increasing returns. This approach starts with potential risks and thus demands special risk…
Trading precious metals has long been a popular choice for investors seeking to diversify their portfolios and hedge against economic uncertainties. Among the most coveted metals in this realm are gold and silver, each carrying its own unique characteristics and…
Crude Oil Trading vs Gold Trading are two of the most actively traded commodities in the world, each with its own unique market dynamics, factors influencing prices, and trading strategies. Both markets attract investors and traders looking to profit from…
Its crucial to understand scalping vs day trading vs swing trading for investors with differing time availability and investment approaches. If you’re evaluating which method resonates with your financial aspirations, personal approach to trading, and available daily market engagement time,…
Many traders fear a bear market would be really bad for their trading. Is this true? Should you trade during a recession? What does the data say? There are ways to exploit a bear market during a recession. A big…
Quantitative trading vs algorithmic trading give traders the chance to make huge profits if they understand its difference. If you’re exploring the contrasting worlds of quantitative trading vs algorithmic trading, you’re in the right place. The crux of the matter…
Confused by the abundance of trading myths promising shortcuts to success? Our article dispels the top 10 trading myths misleading traders today. Discover why quick riches, 24/7 trading, and complex strategies don’t hold up to scrutiny, and learn what truly…
Here Are The Most Popular Subreddits About Trading The trading industry is a popular option for many people looking to generate money. Trading has been around for centuries and many different methods have evolved over time. Reddit is an American…
Scalping is a popular and fast-paced trading strategy that aims to profit from small price movements within a short time frame. To navigate the world of scalping effectively, it’s essential to understand the terminology commonly used in this trading style….
Let’s be honest: Which trading strategy is most successful is almost impossible to answer. It depends on so many factors. However, we can conclude this: The most successful trading strategy is to trade many strategies and types to make sure…
What percentage of traders fail? What percentage of traders are successful? How likely are you to succeed as a trader? Frequently, we read that 90% of traders fail to make money and just a tiny fraction of traders are able…
Swing trading strategizes on the natural ebb and flow of stock prices, targeting gains over days to weeks rather than months or years. In this article, you’ll discover the foundations of swing trading, the strategies for recognizing optimal entry and…
In search of the best trading podcast to guide your market journey? Look no further. Our handpicked selection connects you with the leading voices in trading, providing tactics, insights, and updates essential for thriving in today’s markets. No matter your…
This bundle consists of three strategies that can be labeled volatility trading strategies. The strategies are backtested on the ETF with the ticker code SPY, which tracks the S&P 500. We have not backtested on @ES, but it might work…
Why do trading strategies stop working? When do you stop trading? How can you avoid or minimize that trading strategies stop working? These are the most important aspects in trading because most trading strategies stop working – sooner or later….
Market timing is not easy, and if you get it wrong, it might lead to poor compounding (in the long run). We did a backtest to show what happens when you: One backtest removed the ten best days from…
The US is the largest economy in the world and has the most vibrant and largest (by market cap) stock market on the planet. Many traders the world over want to trade in the US market. Want to know about…
How To Find and Generate Trading Ideas. Once in a while, I receive e-mails from readers wondering how they can generate trading ideas to test. How to generate trading ideas is one of the most important issues for a trader….
Is it possible to find market inefficiencies when trading or investing? Yes, it’s possible to find inefficiencies in the markets. However, if you want to consistently make money in the stock markets, you need to understand how the markets work….
Pump and dump strategies are bad because they are mostly illegal but also immoral – legal or not. A pump and dump scheme benefits just a few “investors” and fraudsters. Stay away if you see a pump and dump. Don’t…
Why are penny stocks bad? The internet is flooded with arguments and courses on how to get rich in penny stocks. Hence, penny stocks attract a lot of attention, both among investors and traders, but also among scammers, unfortunately. The…
What is a good trading strategy? A good trading strategy is simple and has few parameters, is not curve fitted, has a rising equity curve, has a profit factor above 2, and has passed out of sample testing. Thus, a…
The anatomy of a bear market Many traders believe, as a rule of thumb, that a bear market is a market that goes down 20% or more. But there is, of course, no official rule, but a bear market is…
Which time frame is best in trading? We believe the best time frame in trading is daily bars. Every time frame has its pros and cons, but we recommend being agnostic and open for any time frame. You simply have…
A ‘blow off top’ is a critical alert for traders: it’s a swift, significant price increase, typically unsustainable, followed by a steep decline. For those in the financial markets, recognizing this pattern is crucial for timely decisions. This article explores…
Traders navigating the markets are ever in search of reliable methods to spot high probability trading opportunities. Stripping away the excess, this guide simplifies the complexities of the market, presenting clear, actionable techniques for discerning which trades hold the best…
