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  • Trading Probabilities and Common Sense May 27, 2011

    A man appears from nowhere and tell you that he knows your total worth is X amount of money. He proposes to you a game of tossing a fair coin (independently confirmed to be fair) just twice and he will pay ...

  • What Every Trader Should Know About the Win Rate, Profit Factor and Payoff Ratio [Premium Articles] April 18, 2011

    Every trader should know this formula

  • Chaos in Technical Analysis and Backtesting – Part I: Close vs. Adjusted Close March 23, 2011

    This is an article about the impact of data adjustments on technical analysis studies and backtesting, as well as, of the pitfalls of trading system development due to incompatibilities and/or conflicts between data series and analysis techniques. Use of the ...

  • Bill Gross Sold His Holdings of US Treasuries – What Does Technical Analysis Tell Us About His Move? March 12, 2011

    Bill Gross, the founder of PIMCO, sold his Treasury bond holdings late last month as reported by Bloomberg. The manager of the world’s largest bond fund said that he thinks yields are low and he may buy Treasuries again when yields ...

  • Time to Hire a Monkey? Not Really March 11, 2011

    Recently I have noticed a renewed interest in a few blogs and forums about “monkey style trading”. This type of trading usually involves coin tosses, percent stop-losses for risk management and trailing stops for profit taking. This is how it works in principle, according to its proponents ...

  • A Strange DJI Pattern? Not Really March 9, 2011

    A friend who is a hedge fund manager called me this morning and ask me to look at the pattern that has formed during the last 10 days in the chart of Dow Jones Industrial average. At first glance, he thought it looked like a ...

  • Performance of Three S&P 500 Patterns From My 1999 Book March 3, 2011

    A few posts back I presented a basic introduction to price patterns. This post is an answer to those that claim that price patterns are random formations that fail immediately after they are employed in trading and thus have no ...

  • Who Needs the Trading Day? Part Two February 11, 2011

    I already demonstrated in another article the flaws in the Bespoke study about buying SPY at the close and selling it on the next open. Basically, that study did not account for commissions and this effect alone completely changed the picture ...

  • Who Needs the Trading Day? I do February 5, 2011

    A study last month in the Bespoke blog concluded that the simple strategy of buying on the close and selling on the open of next day would have significantly outperformed buy and hold since the launch of SPY ETF. The Bespoke results were published in ...

  • What is a trading “edge”? – Part II December 30, 2010

    In my last post I discussed a popular definition of a trading edge that can be found in the trading literature and discussed in various forums.