- The Overnight Edge in AAPL is Gone But it Persists Elsewhere [Premium] May 25, 2014
Although the overnight edge is AAPL is gone, maybe for good, it persists in some other securities. Here is an example with a substantial overnight edge in 2014.
- 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 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 ...
- 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 in 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 ...
- 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?
- What is so Special About the 200-Day Moving Average? The GLD Case December 23, 2011
The importance of the 200-day simple moving average as a trend indicator is well-known and indisputable. Even those who do not use technical analysis pay attention to this average.