Quantified Strategies

If you have spent considerable time developing a strategy, it’s frustrating if it performs poorly in live trading. What is happening? Why does it perform so poorly when it worked

Something that a person or a particular group of people want very much to have or achieve. Cambridge Dictionary defines the Holy Grail Many traders are looking for the Holy

The first principle is that you must not fool yourself and you are the easiest person to fool. – Richard Feynman When your money is at risk, you easily get

Day trading certainly holds promises of a fast-paced working environment with high returns. Its allure proves practically irresistible to many new traders. It is also a common belief that most

Correlation, which measures the relationship between two datasets, is an essential variable for a trader. How your positions move in relation to other positions is crucial to understand and manage

Do you want to become a trader? Or have you dipped your toes in the water but are struggling to find the right direction? Are you uncertain if trading is

Are there any seasonalities in retail stocks? Some years ago, Jay Kaeppel published an article about retail seasonalities. Put short, the best month for retailers are November, March, and February

A drawdowns is the risk that makes most traders fiddling, changing, abandoning their strategies, or stop trading altogether. Thus, a good trading plan deals with drawdowns before they inevitably happen.

Quant trading, an abbreviation for quantitative/quantified trading, is growing in popularity because of the possibility of having the computer do all the work and thus reduce emotions and behavioral mistakes.

Trading and investing are entirely different ballgames. Both have the same aims, to grow your wealth, but they have various time commitments, risk profiles, and outcomes. Should you trade or

A reader recently asked if we use Heikin Ashi in our trading. We don’t. Neither of us has ever heard of Heikin Ashi! So what exactly is Heikin Ashi? In

There are many reasons why someone might like to become a quant trader. Freedom, independence, wealth, and scalability are a few reasons why someone starts trading, but we suspect the

The Sharpe Ratio is a popular and widely used indicator for comparing the return and its risk. The name is given from its inventor, William Sharpe, who developed the ratio

How do you evaluate a trading strategy? In hindsight, it’s easy to judge a strategy by the result – the CAGR or the annual return. However, the profit factor is

Candlesticks are a popular charting tool and frequently used by promoters using anecdotal evidence. We use candlesticks in our charts ourselves, but not as a predictive tool in our trading

Jim Simons recently stepped back as the chairman of Renaissance Technologies, the asset management group that manages the most profitable fund ever: The Medallion Fund. What is the secret and

This article looks at the MACD-indicator, what it is, and how you can use it. Does the MACD indicator work? In which markets does it work best? Which time frame

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

Chapter 6 of Larry Connors’ High Probability Trading contains a strategy called Multiple Days Up (MDU) And Multiple Days Down (MDD). The book was published in 2009, the trading tests

There are many approaches on how to make money in the markets. Some use fundamental factors, others use technical analysis, while others might crunch numbers to get an edge. The

In chapter 5 of Larry Connors’ book High Probability Trading, published in 2009, there is a trading strategy called %b strategy. The book contains many strategies which we test in

The Bollinger Bands are renamed after its inventor, John Bollinger. The indicator was invented in 1980 and made John Bollinger a pretty famous trader. The bands are included in all

The January effect has for a long time been an anomaly that showed abnormal returns. The January effect in the S&P 500 However, the original January effect has not worked

The January effect is a well-known seasonality and anomaly. To our knowledge, it was published as a strategy for the first time in 1962, according to Victor Niederhoffer in the

What happens to the stock market during Christmas? Do stocks rally at the end of the year? In this article, we look at the end of the year rally in

What is a good trading strategy? A strategy that gives you a high CAGR, returns, or high gains per trade? Not necessarily. This article explains what is a good trading

Today we continue backtesting the trading strategies Larry Connors and his team published in 2009 in a book called High Probability ETF Trading. All the strategies were tested on a

High Probability ETF Trading, published in 2009 and written by Larry Connors and Cesar Alvarez, contains some interesting strategies. They are all mean revertive and tested on the most popular

Larry Connors and Cesar Alvarez published a book called High Probability ETF Trading in 2009. All of the strategies covered in the book showed great results, but almost 12 years

Moving averages are widely discussed and used in the media and likewise frequently used by analysts when making calls about the future. Most traders and investors have probably heard about

This article looks at the ADX indicator. The indicator was developed by Welles Wilder and released in his book from 1978 called New Concepts In Technical Trading Systems. Mr. Wilder

You need to build a portfolio of quantified trading strategies that differ in markets, time frames, and types. Why? Because you want to have a portfolio of trading strategies that

The Relative Strength Index (RSI) was developed by Welles Wilder and first introduced in a magazine called Commodities (now Futures) in June 1978. Wilder published a book in the same

Always inverse, says the famous investor Charlie Munger, Warren Buffet’s friend and business partner. What is inverse thinking? This is when we turn a problem on its head or look

In a series of articles, we want to test different indicators and trading techniques. Almost all indicators are “proved” by anecdotal evidence, and rarely quantified. That’s perhaps not a coincidence: