Category Archives: Trading System Synthesis

Strategies With High Win Rate And Lower Payoff Ratio

Maintaining a constant profit factor while lowering the payoff ratio requires a strategy with higher win rate. In general, high win rate strategies are more difficult to develop but when combined with lower payoff ratio usually perform better during times … Continue reading

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Forward Performance Of Two Machine-Designed Trading Algos

Last April I wrote an article where I introduced a strict validation method for machine-designed trading algos. This article includes  the forward performance of the trading algo in that article, as well as, of another algo that was machine-designed in … Continue reading

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Using Forex Data For Validating Trading Strategy Synthesis Algos

Forex is a zero-sum game and forex price series involve high level of noise caused by robots that operate in that market and a large number of unskilled traders. Thus, it is always challenging to validate trading system synthesis algos … Continue reading

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Price Action Lab Software Update

Version 7.0 of Price Action Lab software was updated to include all three add-ons for Gold, System Code and Momentum. Click here to download the demo.

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Ruined by Hypothesis Testing

Hypothesis testing is often a naive way of assessing the significance of trading strategies because results are conditioned on historical data and can be plagued by multiple comparisons. This is the story of Don, an ambitious fund manager who got … Continue reading

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Identifying Momentum Price Patterns

Momentum is usually identified by a simple price pattern that compares current price to price N periods ago. This article considers an extended class of momentum price patterns and the results are used to develop longer-term trading models based on … Continue reading

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Automatic Generation of Trading Algo Code in Price Action Lab Software

The new system code feature of Price Action Lab significantly improves the code generation capabilities of the software by allowing trading algo generation from any number of price patterns, long, short or both.

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