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 […]
Trading Mean Reversion in Currencies
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
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 […]
Equities Mean Reversion and Market Regimes
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 […]
How to Implement Leverage Using Kelly Betting
Over the last four articles people have been writing in, asking, “How do you deduce leverage from your backtests?” “How do you actually implement leverage in your trading?” “How do you calculate position size?” “How often do you rebalance?” So, to keep this series as hands on and close to reality as possible, this article […]
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