Here’s one quick tip for a backtesting mistake to avoid: on Tradestation, if you develop a strategy using a stop market and a stop loss that gets you out on the same bar: the platform won’t be able to verify whether your stop or target was hit first unless you enable “Look Inside The Bar […]
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Traders are always looking for what the secret sauce to achieving higher levels of performance. I’ve found that the secret sauce is creativity. But, it must be cultivated, nurtured in a systematic way, and backed by rigorous work.
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We will explore a simple concept in trading: scale up or scale out. Scaling up tends to be the preferred technique for the discretionary day trader. The idea is to get really good at trading one market and then increase size. Futures markets are ideal for scaling up. On the other hand, scale out tends […]
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Traditional systems are designed to trigger a buy or sell signal. Discrete buy and sell signals are very useful in that they give clear unambiguous direction. However, a simple buy or sell signal is authoritative and doesn’t convey any additional information that the discretionary trader can make use of. Traditional indicators can be difficult to […]
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The difficulty of building your graybox is that there’s no blue print. But, looking to identify both strengths and weaknesses in your trading may be a start: What do you do already do well? How can you improve what you already do well? Where do you struggle? What do you do poorly? Where are the mistakes? […]
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Anyone can trade well when they are winning but what defines the great traders is what happens when the losses mount. The default belief is that one can’t make money trading. The discretionary trader develops an alternative belief system as they learn they can accurately predict the market. The process is empirical and reflective. Every win reinforces […]
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The keys to successful trading often seem mysterious. One reason that trading might seem difficult is because frankly there are many factors that can impact the markets. The factors that influence the market are dynamic and in a constant state of flux with different factors tending to dominate at different wavelengths and in different time frames. […]
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The idea of “degrees of creative freedom” has bubbled up and started to percolate my consciousness recently. And, the concept is that the more degrees of creative freedom that a system enables then the greater the wealth that is possible to be created–where wealth is the expression of valuable ideas. And, system in this case doesn’t refer to […]
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Accurate confidence is one of the most important skills a strong discretionary trader (or predictor) must develop and possess. A strong discretionary trader should be able to weight how good of a trade or prediction they have and use that weight constructively. If a trader can develop awareness of how good of a trade they […]
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The traditional way to treat the RSI is to treat low RSI levels as good buying opportunities while treating high RSI levels as selling opportunities. However, we seek to gain fresh insight into the nature of RSI, with an eye toward discovering possible momentum return, by exploring the RSI using a visual quantitative approach. Exporting And Visualizing The […]
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