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Going Live With Automation
Going live with an automated strategy is one of the coolest, but also scariest things you can do in trading. Here you are letting a computer trade with your hard earned money. Theoretically, the...
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Battle of the Oscillators…Round 1
In a recent article, Predictive Indicators written by John Ehlers he highlighted a unique indicator used to time market cycles. This indicator is a heavily modified Stochastic Oscillator and was...
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A Complementary Approach To Trading Technical Indicators
In the October issue of Futures magazine, author Jean Folger discusses an important aspect in selecting two or more indicators when developing a trading system. While I don’t recommend simply combining...
View ArticleThe Top Three Pitfalls of Stock And ETF System Development
During my nearly 25 years of experience in the trading business, I have talked to many traders about system development. Futures trading systems and back-adjusted contacts are fairly well understood....
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Why I Prefer Trailing Stops
Whether you trade stocks, bonds, Forex, commodities, or other financial instruments, or whether you are short-term, intermediate, or long-term trader I am sure you will agree with the next sentence –...
View ArticleSimulation: Beyond Backtesting
One problem with traditional backtesting is that it relies on the presupposition that there are repeating predictive patterns in the market. In fact, most trading methodologies rely on this assumption....
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Randomly Pushing Buttons
Before my current circumstances, and before I was a photographer (see above), I used to make music for a living. Specifically, weird-ass techno/electronic music that many people found difficult or...
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Secret Weapon of Stock & ETF System Development
This is the second article in a two-part series where I discuss the top three pitfalls when backtesting Stock & ETF trading systems. In the first article, The Top Three Pitfalls of Stock and ETF...
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Getting Started with Neural Networks for Algorithmic Trading
If you’re interested in using artificial neural networks (ANNs) for algorithmic trading, but don’t know where to start, then this article is for you. Normally if you want to learn about neural...
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Trading The Equity Curve & Beyond
Some trading systems have prolonged periods of winning or losing trades. Long winning streaks followed by a prolonged period of drawdown. Wouldn't it be nice if you could minimize those long drawdown...
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Looking Into The Ulcer Index
Investors utilize a variety of performance and risk metrics to evaluate strategies. These numbers provide a summary of what happened to the strategy historically and can be useful to quickly compare...
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How To Create A Multi Agent Trading System
In a previous article I demonstrated how to build a strategy that will trade the equity curve. That is, a strategy that will stop trading when the equity curve falls below a simple moving average. Lets...
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Finding Out What Works, And What Doesn’t Work
Many traders who try system trading have previously had difficulty at discretionary or manual trading. Most of these folks eventually recognize the benefit of trading a system with well defined rules –...
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4 Reasons Why Scalpers Could Be Dangerous
In this article I am going to share with you four reasons why scalpers could be dangerous and everyone who would commit money to trade with such short-term strategies should be extremely cautious and...
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The Internal Bar Strength Indicator
The internal bar strength or (IBS) is an oscillating indicator which measures the relative position of the close price with respect to the low to high range for the same period. The calculation for...
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Market Seasonality Study
With November almost over I thought it would be a good idea to review our Market Seasonality Study. If you will recall, back on May 18 of this year we closed our or seasonality trade in anticipation...
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4 Ways to Increase my Discipline
In the following rows I'd like to share with you three ways I use to increase my discipline which is the cornerstone of every successful trader I know. The discipline is often the missing part of many...
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Creatures of Habit
"Creatures", in this case = human or algorithm executing entries and exits.I was searching for a generic photo that has the different days of the week, but in different languages, when I came across...
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Broken Strategy or Market Change: Investigating Underperformance
I recently had someone email me about the performance of a strategy I created back in late 2005/early 2006 and traded for a few years. I remember the strategy being a daily mean reversion set up with...
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Is The Christmas Season Bullish For U.S. Markets?
With Christmas just a few days away , I thought it would be interesting to see how the S&P behaves in the days just before Christmas. Do the days just before this holiday tend to be bullish,...
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