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Lessons from a reader: trade review of CREE

I received a good question from a long-time reader on a trade he executed in CREE. Here’s Jim’s (edited) question: I’ve been trying to swing trade for a few years now… Regrettably, the broad market indices usually leave me in the dust each month. An... read more

Trading Edge vs trading edge

I did an interview a week or so ago with Abraham Thomas, one of the co-founders of Quandl. I love doing interviews because a thoughtful interviewer makes me ask questions and think about things in a new way. (Stay tuned for some more insights from that interview, and... read more

Four steps to mastering your fear of trading

Every trader faces fear, sooner or later. In a perfect world, we’d be fearful at exactly the right times and use that fear to manage our risk, but we all know it doesn’t work like this–markets naturally seem to provoke the “wrong”... read more

AUDUSD: Short-term inflections or trend change?

One of the key challenges for discretionary traders is balancing short-term and longer-term information. Err too far on either side, and bad things will happen: Focus too much on short-term, and we are overly responsive to every jiggle of the market, constantly... read more

Exits: know when to hold ’em, know when to fold ’em

We all focus a lot of attention, perhaps too much attention, on where to buy and sell a market, on where to enter trades. Today, let’s spend some time looking at the other side: where are you getting out? Some categories are useful here, and they are not... read more

Reader question: what’s wrong with Fibonacci?

Matt asked a question that I sat on for quite a while. I wasn’t sure how to write a reasonably concise answer to a good question, but I’ll try today. First, the question: I see you don’t believe in Fibonacci ratios, but it seems every book and... read more

Patterns within patterns

One of the problems swing traders in stocks face is correlation; the sad reality is that stocks mostly move together, and trades in stocks mostly win and lose together. If you buy four names and short four at the same time, there’s a pretty good chance that one... read more

Resources for learning Python

I received a good question in response to my previous post on starting to learn Python for finance. Here’s Mark’s question: Thanks again for all your work and all that you share. I am a little behind you in programming abilities but working furiously... read more

First steps in Python for traders

I’ve written a bit on the difference between high and low level programming languages, and on why I think Python is the right choice for many traders today. In this post, I’ll assume you’re more or less starting from scratch, and will lay out the... read more

No, it’s not all the same.

In my last post, I showed a quick test of a simple system applied to the futures markets. The point of that post was to show how a simple quantitative methodology can show us something about the market, and to apply the quantitative methodology to a trading idea which... read more

Testing a trend-following approach in futures

In this post, we’ll take a look at a common trend-following trading idea: channel breakouts (also called Donchian channels). I want to share with you a way of looking at market tendencies, and structuring tests of those tendencies, that I have found to be very... read more

Choosing a programming language for finance

So let’s assume you’ve read my preparatory posts (here, and here), and that you’re on board with the need to learn to do your own analytical work in the markets. Let’s also assume that you’ve taken a deep breath and decided that you need... read more

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