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 […]
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…
For a lot of people day trading represents the attainment of their trading prowess. However, you need markets to move to capture profit, especially if you have to cross the bid/ask spread. It therefore makes sense to trade only during those times in which you have a range-expansion. The indicator Range.mq4 measures exactly that. If you place it on a 1M (minutely) chart, and set its LookBack period to 15 (that is the last 15 minutes), the indicator will show you the height of the range of …
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:And to all those who don’t like spoilers: (2) will be covered in more detail later in this article series, so close your eyes; but foll…
- Look ahead bias, and is it really that bad?
- Kelly is always touted as optimal. Is it really that optimal?
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…
Taking Control of Your Trading Numbers – that means actually being able to replicate the results that others produce. It’s the only way to be sure that you know what’s going on. Well, many people got back after last week’s article asking about the details of the calculations as well as about some of the more technical jargon:
- What do I mean by asset?
- What’s an asset bias?
- What does it mean to risk-adjust returns?
- How can I go about calculating the charts in the article?
- How …
It’s useful to be able to add a trailing stop to your trades. Given I never got my head around the MT4 functionality I wrote this small EA, which does the job. Place it on top of the currency chart and give in the number of pips by which it should trail your trades. You need to put it on currency charts for which you have trades. So if you have USDJPY trades put the EA on an USDJPY chart. This EA will not trail stops for trades that have a non-zero magic number. So if you have trad…