Trading Order Out of Chaos
Market timing refers to the fact that by judiciously choosing entry and exit methods in a given market you can out-perform buy-and-hold. The first question of course is why you should buy-and-hold in the first place. The idea stems from the equity markets. Historically they have risen. The famous chart of course is the S&P […]
In this article I’ll follow up from Part I, on using the UK Services PMI to trade the GBP. The questions we’ll answer are:Let’s cover the main themes that affect the Foreign Exchange Rate:
- What economic indicators for GBP are out there and which can we use?
- How do you set up a macro system?
- What does it mean to trade a basket of currencies against GBP, or is there a preferred pair to trade?
- Inflation: influences Central Bank behaviour, but also tells us about price increas…
The London Breakout Strategy falls under the category of Open Range Breakout as developed by Toby Crabel. In this article we’ll look at some results with regards to this strategy, as well different ways of trading it. Let’s start out with the notion of Open Range Breakout. The key concept behind this strategy is that the range set at the start of the day sets a neutral zone for the rest of the day. If price moves either side of this range it is a strong indication that price will wa…
More Money Than God: Hedge Funds and the Making of the New Elite is simply WOW! All I can say is WOW! Mallaby apparently held in excess of 1000 interviews and was given access to emails by some of the main players in the history of hedge funds. If you have read the Market Wizards trilogy, then this book actually fleshes out some of these individuals and provides the historical setting. The book is made up of 14 Chapters, which track the history of hedge funds both chronologically and stylist…
In this second part of the Mean-Reversion in Equities series we’ll cover the reasons behind why mean reversion works in various market regimes. In the previous article we combined the idea of looking at two consecutive down-days combined with buying the S&P 500 while it was below its five day moving average. A question that stands out: why does it work so well? And, will it ever stop? The answer to this question lies at the heart of developing good trading strategies.What’s a …