The Slings and Arrows of Outrageous Fortune
A look at what normal variability in trading results can really mean.
Yes, Virginia…
[dc]I[/dc]t's nearly impossible to go a day in December without hearing the phrase "Santa Claus rally." There is an impression that the market tends to rally into the end of…
The Market is Not a Math Problem
Human behavior drives markets. Apply quantitative techniques with caution.
Reader question: Mean reversion in futures and different timeframes?
Adam, you say stocks are more prone to mean reversal and we know commodities tend to trend. But what about equity index futures like the ES? Are they more likely…
Random Support & Resistance Levels
http://www.youtube.com/watch?v=5mPp7_fajvo
How Do You Calculate Volatility In Excel?
How to calculate a simple historical volatility using Microsoft Excel.
Small Stops, Big Risks?
[dc]S[/dc]ome of the most persistent myths about trading revolve around the idea of low-risk trades. You will often hear traders say that they took a trade because the risk was…
Two Statistical Studies
[dc]I[/dc] want to share two statistical "studies" with you. Both of these were done this weekend, using the cash S&P index from 1/2/1987 - 10/14/2011. Both show a strong and…
Careful With Correlations
A casual understanding of mathematical concepts can often lead to incorrect conclusions. This post shows that the direction of markets on charts does not necessarily reveal anything about the correlation between those two markets.