As summer trading (hopefully) comes to an end we all might be in store for a bit more volatility and an increased likelihood for some downward pressure on the S&P 500 (NYSEARCA:SPY) in the coming days. Historically we are entering a negative time of the year dating back to the…
Everyone talks about edge and every successful trader I know has one (most have a few trading edges or more). However, what does “edge” actually look like? The quest for your first trading edge or simply adding one to your arsenal can be a much easier task if you understand…
What is Turnaround Tuesday? Is it a Wall Street cliché, media company selling headline, or verifiable trading edge? Maybe all of the above, depending on its usage. But it has also been a simple trading edge over at least the past 15 plus years or so. Below you will see…
Can you trust a backtest? Below is a simple strategy that uses intermarket signals from the Japanese Yen to trade US 30 Year Bond Futures. It only has 2 rules for entry. The strategy produces fairly stable in-sample returns especially for being so simple. The in sample period is from…
The market is “overbought” or “oversold” are common phrases you will hear across the finance space. However, it is actually extremely rare for these conditions to be true. Today, we’ll attempt to show how trading rules can provide a better picture of the market while enhancing trading performance. First, let’s…
Much of trading can be broken down as conditional probabilities. And there’s a distinct benefit in understanding what is likely to happen if some condition (or set of conditions) is true or not. For example, is tomorrow more or less likely to close higher if we are above the 200 day moving average…
Measuring price moves is the name of the game. However, measuring price moves given recent context can add additional benefits to your trading performance. At times, the market can get very quiet which can make a 1% price drop feel like a 10% price drop (think summer trading). At other…
Curve-fitting is almost certain death for a trading or investment strategy. So, what is curve-fitting? Well, you know when you test a trading or investment hypothesis, fall in love with the historical results, and then the idea fails to generate similar (or even positive) returns once you decide to trade…
So many traders quote market axioms and some actually put their hard earned money on the line based upon them. The most popular (arguable) technical indicator is the moving average. Everyone knows what it is and almost everyone still tracks one or two of them. It is generally believed that…