Mechanical Trading Strategies – Advantages with Mechanical Rules and Edges

A lot of the best traders use some kind of mechanical trading strategies and rules in their trading. “Mechanical” implies that the rules are based on some kind of objective rules, usually quantified data. The trader should follow these rules exactly without hesitation or emotion. In this respect, mechanical trading is the complete opposite of…

How I Allocate My Capital And How Commissions Grab My Gross Profits

I have received some e-mails about how I allocate my capital. I admit that this is a problem and quite a difficult task. Sometimes I have no positions, suddenly all my signals trigger and the allocation becomes a problem. My aim is to trade different stocks that correlate as little as possible. Of course, that…

Disadvantages Of Backtesting (Why Backtesting Doesn’t Work)

You rarely manage to find trading strategies that perform better in live trading than in backtests. Why is it so? This is because of the disadvantages of backtesting. You need experience in backtesting to avoid the many pitfalls along the way. In this article, we look at the disadvantages of backtesting. There are many reasons…