Trading Order Out of Chaos
Of all things on this planet?! Aren’t they boring? Not explosive enough? Isn’t this stuff what old people invest in? Also, aren’t they supposed to start to sell-off? And how do you get your hands on these over the counter instruments. In the first article of this series on Creating Profitable Trading Strategies we started […]
Mean Reversion trading works for equities; and currencies. We saw in the last article how combining two simple ideas for equities produced a stable system over the last 30 years. Can we repeat a similar analysis for currencies? Yes! However, be warned. Currency trading is a different magnitude of difficulty to equity trading. Currency traders […]
Equities mean-reversion works right now. And as part of Building Consistently Profitable Trading Systems it forms a key component. In this article we’ll present the final version of the mean-reversion system to form part of the trading toolbox, and the final portfolio. It’s the Larry Connor’s RSI2 strategy. And it’s based on the two concepts […]
At last! We’ve made it to the mean-reverting part of the series, starting with our focus on equities and their mean-reversion habits. So, here’s the deal. We’re going to keep it simple, just like in the previous three posts, and start from the ground up. Over the following series we’ll culminate in a simple, straightforward […]
Backtesting and Over-Leverage are the bane of any systematic trader. A shout out to Peter who raised both these points on the previous article in the series: Trading Numbers So, what are the two issues we’ll address in this week’s article: Look ahead bias, and is it really that bad? Kelly is always touted as […]
As discussed in the articles on Bullish and Bearish Engulfing Bars, this indicator highlights the bars, and allows you to implement those trading strategies. The only input is an offset as to where to put the arrows indicating the bars in pips. This is best placed on an hourly chart. The indicator will loot at the previous 8 bars, and check to see if the first group of four hourly bars engulfs the previous four hourly bars. This is then rolled over with every new hourly bar.
I’ve written several articles on what happens during news announcements, and associated quick trading strategies. But from a regular trader’s perspective, surely there must be another way to approach these things. In this article I’ll given an overview as to how to trade these news announcements in a slightly more leisurely way, and see if there is anything to be had out of trading against market hysteria. The instrument of choice will be the EURUSD, though you can pick any other inst… Read more
This week’s article is more tongue in cheek: do natural phenomena affect the markets? What we’ll be particularly looking at are the full moon, new moon, and solar eclipses, especially since we had one on the 9th March this year. Back in 2005 I wrote a similar article at Barclays Capital for the weekly quant newsletter we sent out to clients. It was a summer lull, and it seemed like a swell idea. The results back then indicated that it was the New Moon rather than the Full Moon that really imp… Read more
At last! We’ve made it to the mean-reverting part of the series, starting with our focus on equities and their mean-reversion habits. So, here’s the deal. We’re going to keep it simple, just like in the previous three posts, and start from the ground up. Over the following series we’ll culminate in a simple, straightforward (and well known) system that still works. In detail for this article:
- What do we mean by mean-reversion and how can we measure it?
- What are some natural meth… Read more