Category Archives: Trading System Analysis

Let Us Toss a Biased Coin

The quantitative analysis in this blog shows that when a market has an upward structural bias, such as the S&P 500, for example, then random trading based on a biased coin guarantees positive performance over the longer-term. A large percentage … Continue reading

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Free Demo of Price Action Lab Software

There is now a free demo of Price Action Lab available for download. Price Action Lab is the most advanced software for quantitative discretionary and systematic trading based on parameter-less price patterns. Share

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Fooled by Machine Learning Applied to Trading Algo Development

The chances of finding a profitable trading algo by applying machine learning are for all practical purposes zero. There is always a small probability of success  when using machine learning but one of the problems is that the results cannot … Continue reading

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Release of Price Action Lab v7.0

We are pleased to announce the release of Price Action Lab v7.0.  The new version offers several new features and comes with an add-on that allows a massive increase in the capabilities of this quantitative trading software. Share

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Long/Short Symmetry Effect on Trading System Performance

Although some quants prefer long/short symmetric trading systems there is no conclusive evidence that they offer any advantages, especially when dealing with markets with a structural bias. In this blog post I present two examples of the performance of trading systems that were … Continue reading

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The Contrarian Z-Score and Why You Should Always Strive to Reject Trading Systems

When I first read about the z-score system some years ago I knew it was a fluke. Descriptive statistics cannot be easily converted to edges due to non-stationarity.  More importantly, a quant should be always suspicious and strive to reject systems. … Continue reading

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Buying the Dips Can Provide That Much Needed Excess Alpha

Dip buying has been prevalent this year. There is a reason for that: dip buying has the potential of offering the excess alpha that is needed to overperform a benchmark index. Specific examples and statistics are included using the SPY proxy. Share

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