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The Blog of Adam H Grimes

musings on markets, risk, and life.

Why should you be able to make money?

This is an obvious issue, but one that is often ignored. The argument of many academics is that you can’t make money trading; your best bet is to put your money in a diversified fund and reap the baseline drift compounded over many years. (For most investors, this is... read more

Reader question: what’s the music?

I recently received a couple questions on the same topic: people asking where the bumper music I used for the videos for my (free) trading course comes from, with a few extremely flattering guesses as to who the composer was. As I’ve said before, I was a... read more

When markets go wild

Markets normally move in alternating waves of with-trend impulse moves interspersed with lower volatility pullbacks. This is a reliable trend pattern, and, in fact, is enough to base a trading plan on. Typically, a market will make a sharp move in one direction, will... read more

What works?

I post a lot of critical thoughts, and spend a lot of time encouraging people to think deeply about the technical tools they use. Recently, I’ve received a lot of questions about what I think actually works. Though I’ve answered this in some depth before... read more

That trend indicator, is it helping or hurting?

Continuing from my previous post on moving averages, let’s take a look at using a moving average as a trend indicator. Again, here is some material from the unpublished part of my book, on using the slope of a moving average as a trend indicator, and a look at a... read more

Moving averages: digging deeper

Ok, so I’ll warn you up front: this one’s going to be a little bit difficult. The response to my post on the 200 day moving average in the DJIA and the S&P 500 was very positive, and I received many thought-provoking questions and requests for more... read more

Does the 200 day moving average “work”?

This is one of those technical questions that does not have a quick, simple answer. The best answer is “no, not really, and almost certainly not in the way most people think”, but there are some nuances to consider. I have done extensive quantitative work... read more

The line in the sand

Everyone does it. I used to do it too, but I stopped because I realized I looked silly a few months down the road. You’ve heard the predictions: “if this level breaks, it’s game over”, “if the 200 day breaks, it’s the end”,... read more

The big problem with seasonality

This is the time of year when we typically start hearing seasonal predictions for the stock market. There are a few problems with seasonality, the biggest of which is that market data is highly random, and analytical tools will tease seasonal tendencies out of... read more

This is what “risk off” looks like in stocks

The chart above shows the 12 month return (vertical axis) against the shorter-term momentum (horizontal), for the major sectors of the S&P 1500. We can clearly see that the only two sectors showing any remaining positive momentum are the defensive Utilities and... read more

Where the wild things are? No, where the open is.

The open, in many ways, is the most important price of the day; action off the open can often define the character of the entire session and even have implications for following days. Even if you are a longer-term trader, there are elements of short term price... read more

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