- Your Next Challenge Involves Staying Ahead of Academic Research November 7, 2012
You have worked hard to come up with an edge and you have employed all sorts of measures to preserve it. You have built your fund business the hard way by delivering absolute return to clients. Next thing you know ...
- There is no Evidence that Counter-Trend Trading is Viable November 7, 2012
Trend-following is a very popular trading method employed by funds, longer-term investors and even mechanical and discretionary traders. This method of trading is compatible with common sense and its success has been verified in practice by multi-year performance records showing exceptional ...
- An Analysis of the Double 7s Strategy [Premium Articles] November 5, 2012
In this post I analyze the “Double 7s Strategy”, originally revealed in the book Short Term Strategies that Work: A Quantified Guide to Trading Stocks and ETFs, by L. Connors and C. Alvarez. The backtesting results indicate that this popular and ...
- Risk of Ruin For Dummies November 2, 2012
A good percentage of traders and investors get ruined because they are deceived into believing that they can be profitable in the longer term even if they are wrong more often than they are right provided they win multiples of what they lose, on ...
- Same Investments But Divergent Fortunes October 8, 2012
Both read the same newsletter. Both followed the exact same advice and purchased shares of BubbleNet, Inc. Yet, John lost a small fortune while Bob made a small fortune. How did this happen?
- Machine Designed High Reward-Risk SPY Trading System October 5, 2012
In this example of machine generation of trading systems, the steps are presented for discovering price patterns with a high reward-risk ratio for SPY using the Price Action Lab search function. The in-sample results are tested on a portfolio of ETFs and also cross-validated in an out-of-sample to eliminate ...
- The VIX Illusion September 20, 2012
In my opinion, most of what one reads about VIX and its relation to stock market moves can be attributed to common misconceptions and chart illusions and possibly to some misinformation campaigns where the non-technical investor is the target. The ...
- The Impeccable Timing of QE3 September 17, 2012
The announcement of QE3 propelled S&P 500 passed strong longer-term resistance at 1440.14. In my opinion, in the absence of the announcement and the backing of the ECB the index would have made a short-term top or even would have started on a Fibonacci ...
- Forward Performance Report of Machine Generated Trading Strategies September 4, 2012
Forward performance testing is considered the third and final stage before employing a system in actual trading. The first two stages are the in-sample and out-of-sample testing. This is a report for 6 systems that have been developed using Price Action Lab for 3 ETFS (SPY, ...
- Fooled by Multiple Comparisons When Developing Systems For Single Securities or Portfolios August 31, 2012
The idea that systems developed on historical data of a portfolio of securities have better chance of being non-random as compared to systems that are developed for a single security is based on the assumption that the size of the rule set used in the data-mining ...
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