When percents fail
Let's think a bit about "signal generation". When we test something in the market what we're looking for is an answer to "What happens after _______ occurs?" This is really…
Understanding intermarket relationships with scatterplots
Please read my last post first, before you begin this one. I ended the last post by suggesting that we were probably more interested in changes than in price levels.…
Gains and losses: understanding returns in assets and trading accounts
One of my readers, Anthony, sent me a good question about doing some statistical analysis on stock indexes. I think there are some important lessons here. Here's the question First,…
Showing relative performance: simple charts
Yesterday, I discussed some reasons why traders might want to consider looking at, or trading, the relative performance between markets. Today, let's look at a simple way to display that…