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  • Trend-Following: Classical vs. Quant Traders November 24, 2022

    In trading, there is often a difference between what people think they are doing, and what they are actually doing, depending on a perspective. In trend-following, there are two main schools of thought. Classical trend-followers assert they do not make forecasts ...

  • Convergent Vs. Divergent Trading Strategies November 19, 2022

    Some traders classify trading strategies as convergent or divergent. Trend-following strategies can be both convergent and divergent. Convergence and divergence are two terms often used in technical analysis to describe how price moves relative to an indicator. If the price and ...

  • A Bad Week For Trend-Following November 14, 2022

    The week ending November 11, 2022, was a bad one for trend-following due to violent reversals in equities, fixed-income, and forex markets. The violent reversals occurred after the October CPI release and the expectation of “peaking inflation”. The S&P 500 and ...

  • Price Action Anomaly Detection Signals November 10, 2022

    Starting today, we are offering price action anomaly detection for 32 ETFs to our Market Signals and All-in-One subscribers as a free bonus. Below is a recent example of price action anomaly detection. Results of DLPAL DQ price anomaly detection for 32 ...

  • Trend-Following Strategy For Trading Futures November 8, 2022

    A trend-following strategy for trading futures contracts in the daily timeframe and a brief discussion of the risks and limitations. For all backtests in this article we used Norgate data. We highly recommend this data service (we do not have a ...

  • Entries Make The Difference in Trend-Following Performance November 6, 2022

    Trade exits are important in trend-following because they determine how well the strategy captures trends. But trade entries make the difference and deliver the alpha. The debate has been going on for years as to whether the timing of entries is ...

  • Fundamentals Are a Poor Predictor of Equity Market Returns November 4, 2022

    In the short-term fundamentals may affect investor sentiment and behavior, but in the long term, they are a poor predictor of equity market returns. Many traders with skin in the game have noticed a low correlation between fundamentals and equity market ...

  • Systematic Vs. Discretionary CTAs October 31, 2022

    Based on historical returns since 1987, I show that the returns of top AUM CTAs and discretionary trader returns are statistically indistinguishable. The only way to determine whether a systematic trader follows a system is to have the system and compare ...

  • Strategic Diversification With Tactical Investing October 26, 2022

    Is strategic diversification with tactical investing an oxymoron schema? In a sense, it is, and it also has some hidden risk variables. However, even strategic investing has an embedded tactical investing dimension. Equity indexes are frequently rebalanced based on constituent strength ...

  • Records Depend on Metrics October 24, 2022

    Most records in the market depend on the metric under consideration. When the metric changes, the performance changes, and records can vanish. An example of recent US dollar index performance is included. The US dollar index has stayed above its 200-day ...