Tag Archives: risk of ruin

Dealing With The Infinite Possibilities Of Price Action

In articles in blogs and in financial and social media, quants identify patterns in some securities that appear profitable or unprofitable. In many cases these attempts reflect a fight against infinite possibilities and insufficient samples but also show lack of … Continue reading

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Rule No. 1 And The Importance of High Win Rate

Rule No. 1 is never lose money. Rule No. 2 is: never forget Rule No. 1. These are the rules, reality may be different. Even Warren Buffett who stated these rules has lost money. But the idea is to aim … Continue reading

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What You Want From The Market Vs. What It Can Give You

Although there are many rules about trading, I can offer only one in this article because after nearly 25 years in the markets, I have seen many popular rules violated one after the other. My rule is: try to get … Continue reading

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Market Timers And Gambling

Arguments in favor of market timing usually rest on the existence of the momentum premium anomaly and empirical analysis that shows it can be captured with relatively simple strategies, such as moving averages and price rate of change. However, these … Continue reading

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Chartists and Trend-followers Need to Trade More Frequently Than Most Quants

Besides the fact that chart patterns are mostly random formations (see head and shoulders, double bottoms, triangles, flags, etc.), chartists also face some practical problems having to do with position size. ¬†Trend-followers also have similar problems. This is because position … Continue reading

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