Coin flips and graybox thoughts

It is difficult to imagine a singular rules-based trading system that can accurately capture what expert level discretionary traders do because the expert trader is primarily forward thinking and speculating. Yet, even the expert discretionary trader faces two significant problems. The first problem is that even if one achieves a high accuracy in speculation, it … Continue reading Coin flips and graybox thoughts

Percent Change, Normalization, Standardization, Percent Rank

Data only makes sense, only has meaning, when it is understood in relation to something else. Four common forms of making sense of data are: percent change, normalization, standardization, and relative ranking. These forms are very useful for building trading systems, and many machine learning techniques do not work well unless the data has been … Continue reading Percent Change, Normalization, Standardization, Percent Rank

What futures are offering the best trading opportunities?

The futures day trader may naturally want to know: what markets are offering the best opportunities? One option is to look at the daily range in dollars and total volume of the popular futures contracts. Another option is to look at the markets that the best performing trading systems are trading well. Striker Securities and … Continue reading What futures are offering the best trading opportunities?

Technique for backtesting intraday strategies

The traditional way to backtest or develop strategies is to take a very long history and run your rules over that history. The objective is to find rules that produce stable or consistent returns. However, I have recently been experimenting with another technique for developing intraday strategies where I load from only a single to … Continue reading Technique for backtesting intraday strategies

Using simulation to discover optimal stop loss

If you are a discretionary trader then you may have wondered what the optimal stop loss and target might be. One answer is to use simulation and the power of optimization in an attempt to find universal optimums under given conditions. A strategy is developed that will enter randomly but only under certain conditions: the … Continue reading Using simulation to discover optimal stop loss

Is trading a pipe dream? Lessons from Conor McGregor

The dream of trading for substantial profits can often seem like merely a pipe dream for the small under-capitalized trader. ¬†One might find some surprising inspiration in the rise of MMA's super star Conor McGregor. He has pursued his dream of MMA and combat sports with a conscious, deliberate mindset, and yet people have doubted … Continue reading Is trading a pipe dream? Lessons from Conor McGregor