Monthly Archives: November 2011

Dow 4,000? What Technical Analysis Says or Doesn’t Say About Such Possibility

Recently I read an analysis about the possibility of Dow dropping to 4,000 or even as low as 1,000. The claim was that technical analysis of long-term charts supports such a possibility. I argue here that it is not pure technical analysis that … Continue reading

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The Many Faces of Trading Expectancy

Some authors define trading profitability using the expected value or expectation, a.k.a expectancy. However, it would only suffice for them to say that a trading system, trading method, or even investment program, is profitable if the net profit/loss is positive, i.e. if it … Continue reading

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Trend-following Disaster on the Horizon?

October was another bad month for some trend-following funds adding to the monthly losses realized since the middle of this year. Funds with exceptional historical records in terms of annual return and drawdown are down 25% or even more year-to-date, making someone wonder whether the negative … Continue reading

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Identifying High Reward-Risk Opportunities for Short-Term Trading

Last month I presented examples in two posts (first and second) of high reward-risk patterns discovered with the help of Price Action Lab in the popular ETFs SPY and QQQ. In this post I will show that such patterns may be found in S&P 500 E-mini … Continue reading

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Probability is Common Sense

This is another post on the defense of common sense. In my opinion some preconceived ideas about probability and risk often attribute some common sense decisions by humans to lack of rationality. Here, I comment on a recent example from another blog.

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