Introduction to Automated Trading Systems Automated Trading Systems (abbreviated ATS) are computer programs that execute buy and sell orders in financial markets automatically, following predetermined algorithms. Such systems bring precision, discipline, and efficiency to trading by mostly eliminating emotional biases, ensuring timely execution, and allowing for 24/7 trading. ATS also offer the benefits of backtesting,…
It’s paramount that you you include reinvested dividends in your backtesting. To show you why, we backtested a trading strategy using two different datasets: on dataset not including reinvested dividends and one including reinvested dividends. The difference is huge: the first dataset ended at 554 000 dollars, while the the dataset with reinvested dividends ended…
You’ve probably heard much about mindset and risk management if you’re an aspiring trader. While these are essential factors in successful trading, they’re not the only things you must focus on. In fact, our opinion is that too many traders put too much emphasis on these aspects and not enough on something even more critical:…
Is strategy optimization good in trading? Are optimizers error maximizes? Do small input errors result in large output errors? Strategy optimization in trading is good if done correctly and below you can read how to optimize a trading strategy. Optimization has negative associations for many traders, just like curve fitting, but optimization done correctly can…
In financial trading, as with most aspects of life, everything is getting automated, thanks to advances in artificial intelligence and machine learning. From vital signs in cardiology practice to price changes in the financial market, people are building systems that track relevant data and automatically effect the right actions based on changes in the tracked…
Backtesting is the cornerstone of this website. We aim to quantify everything about the stock market, hence the name. We have conducted plenty of reader polls, and you find them all in our article about trading strategies statistics, truths, realities, and facts. We made a poll on Twitter recently. We asked the following questions for…
We believe backtesting is crucial to have consistent success in trading. It makes you disciplined because it forces you to write down specific trading rules. This way, you can see if your strategy has a positive expectancy. We suspect most traders don’t have a positive expectancy because they use anecdotal evidence and focus more on…
Since the emergence of the internet, algorithmic trading has come to dominate the financial trading world, but what percentage of trading is actually algorithmic? About 60-75 percent of overall trading volume in the U.S. equity market, European financial markets, and major Asian capital markets is generated through algorithmic trading, according to Select USA, in 2018….
The number of trading days is about 252 days for the U.S. stock market. The number may vary from year to year, as not every year has 252 trading days. For example, the 2020 trading year consists of 253 trading days, but 2021 will have 252 trading days. Whether you are a stock trader or…
Backtesting is a crucial component of developing and refining trading strategies. It involves testing a strategy against historical data to evaluate its performance and potential profitability. Historical data, which provides a record of past market prices and other relevant information, is essential for accurately simulating trades and assessing the viability of a strategy. In this…
