- Update on the Market Dynamics Indicator [Premium] May 10, 2014
This indicator of market dynamics reverted towards its mean value this week after a brief rise during the previous week and it is now set to test important levels.
- Introducing the Gambler’s Fallacy Indicator [Trader Education] February 26, 2014
This is a simple indicator of momentum but it can also point to extreme levels in the sense of gambler’s fallacy.
- The Trading System Inversion Paradox [Premium Articles] November 4, 2013
This paradox arises because being a consistent loser in the markets is as hard as being a consistent winner.
- PSI – The Probability State Indicator [Premium Articles] September 27, 2013
A few days ago I was reading one of my old graduate texts on probability theory and noticed a section that I have forgot all about, or to be more precise, I did not pay attention to it at that time ...
- Fooled by Random Backtesting May 20, 2013
Backtesting trading systems on historical data is again becoming popular almost 30 years after it started being used by individual traders due to recent advances in web technology and server speed that allows its online implementation.
- The Golden Cross Trading System Lacks Intelligence May 3, 2013
Many have claimed success trend-following the markets. But a fair assessment of the situation requires to also count those who got ruined by it and this is not easy.
- The Main Cause of Failure of Some Popular Technical Trading Methods December 21, 2012
Trend-following based on indicators and classical chart patterns are two trading methods that were developed in mid 20th century using data from the equity markets mainly. These methods worked well for an extended period of time in those markets due ...
- A Common Mistake in Calculating Correlations December 11, 2012
No information is reliable until it is checked thoroughly.
- Are the Returns of Your Fund Manager Platykurtic or Leptokurtic? November 20, 2012
If you do not know the answer or, even worse, if the manager does not know the answer, then you may be up for surprises in the future, pleasant or unpleasant. Most fund managers focus on return and risk as measured by volatility 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 ...