- Probability is Common Sense November 2, 2011
This is another post on the defense of common sense. In my opinion some preconceived ideas about probability and risk often attribute some common sense decisions by humans to lack of rationality. Here, I comment on a recent example from another blog. The following is ...
- Optimal Position Size Methods and Other Misconceptions August 26, 2011
Optimality usually refers to a solution to a problem derived with respect to some objective function.
- Are Some People Able to Predict Market Moves by Seeing Into the Future? June 4, 2011
If this is true, it is a serious issue that can jeopardize the whole idea of fair markets and much more. The question is: Are there people who can see into the future and, as a result, profit from future ...
- 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 ...