Linear vs logarithmic charts and scale is important to understand because the difference between linear and logarithmic charts might be huge – the bigger the scale the more it matters. The difference between a linear chart and a log scale grows significant as the time frame expands. In this article, we explain what a log…
Bond trading strategies are difficult to find. Bonds are susceptible to erratic macro numbers and we believe bonds are harder to trade than stocks. Can the Japanese stock market predict the trend in US Treasury bonds? In this article, we look at how the Japanese stock market has predicted the trend in US Treasury bonds…
Keltner Bands Trading Strategy (Keltner Channels) is a lesser-known sibling of the Bollinger Bands which are widely used and pretty famous. Despite being rather unknown, Keltner Bands are still included in most software packages. In this article, we take a look at Keltner Bands to see what it is, how they are calculated, how they…
The anatomy of a bear market Many traders believe, as a rule of thumb, that a bear market is a market that goes down 20% or more. But there is, of course, no official rule, but a bear market is regarded as both longer and steeper than a correction. However, as a trader, the most…
Does trend following work in the S&P 500? We recently came across an article called Breaking into the Blackbox: Trend Following, Stop Losses, and the Frequency of Trading: The Case of the S&P 500. It’s written by academics, but in plain language without complicated math, so everyone can understand. In this article, we look at…
Trend following the S&P 500 is probably not the sexiest thing to do. Back in 2012 Meb Faber published a paper called A Quantitative Approach To Tactical Asset Allocation in the Journal of Wealth Management. Meb Faber found the 200-day moving average useful and decided to look at the following simple trend following system in…
Stock and sector rotation is when you switch between different asset classes or stocks. In this article, we look at different types of stock and sector rotations and why they make sense. In the stock market, we have momentum and sector rotation (for example between different ETFs like technology and oil), but you can additionally…
Simple vs complex trading strategies have a clear winner: Simple trading strategies trump complex trading strategies. Trading needs to be simple and easy. Our aim is to build and create simple automated trading strategies and trading edges that you can use in your trading. You need just a few variables in your trading strategies. Street…
Pairs Trading Strategy involves being neutral to the direction of the market. This article looks at what pairs trading is, how it works, and its advantages and disadvantages (pros and cons). The main benefit of pairs trading is market neutrality. In the end, we test some simple pairs trading strategies. Pairs trading is profitable and…
Proprietary trading – pros and cons – advantages and disadvantages There are both pros and cons to being a proprietary trader. Proprietary trading might not be so different than retail trading and you can mostly trade proprietary trading strategies as a retail client. The biggest advantage of being a proprietary trader is leverage. I was…
