Image via Wikipedia In a recent discussion among traders, the idea of how to measure the correlation between various ETFs in the world market model arose. Here is my method: I set up a table, updated automatically daily iwant to compare the daily % gains and losses as the data points, then just pick the […]
Tag: ETF
Traders roundtable: the three phases of new system innovation
At a recent traders roundtable discussion, we started to review the procedures and practices that each of us followed for coming up with new ideas to trade the market. While each trader have their own specific routines and follow, there were some aspects of their practice that were in common with each other. Here are […]
Profitable ETF trading strategies: cooperating with the voice of the future
Trading is by its very nature a crapshoot, filled with uncertainty. People find trading so difficult because it rewards the ability to maintain an open mind with respect to performance and uncertainty, whereas our pattern matching brain desires to create order out of chaos no matter what the cost. We like to believe that there […]
Profitable ETF trading strategies: a thought experiment with relative strength
Typically, traders will apply various technical analysis indicators to the behavior of price of an instrument in order to find moments of advantage. Many times these are combined in systems of ever-increasing complexity and apparent sophistication. All of these concepts however are based off of direct behavior of price. That’s not the only way that […]
Profitable ETF trading strategies: the power of focus
I have a good friend who has been struggling for years to become a professional trader in the stock market. He is well-capitalized, smart, a quick learner, humble, energetic, self disciplined and passionate about his desire to be a full-time trader. And yet, after years and years of trial and error he has not made […]
Profitable ETF trading strategies: reflection theory and its implications on back testing
A simple explanation of reflection theory comes from the mathematical field of set theory and statistics. The theory can be made as complex as you want it to be, based on your interest in statistics and math, but the essence of it is intuitive and has some interesting insights for back testing your systems in […]
Profitable ETF trading strategies: the importance of the initial capital preservation stop
Chat rooms and discussion boards are filled with the talk of what to do about stops for active traders? This discussion can seems take on an almost religious fervor and I have never actually seen a single discussion thread where anyone’s mind was ever changed or consensus was ever reached. That probably relieves me of […]
Profitable ETF Trading Strategies: appreciating the power of rehearsals
Rehearals are considered to be one of the highest payoff practices in the military planning process. It’s where units develop and reinforce the patterns of action and decision-making that make all the difference in combat. Rehearsals will improve your trading practice as well, if you understand how to do them well. There are 4 main […]
Profitable ETF Trading Strategies: understanding Average True Range (ATR)
One of the most powerful measurements in the technical trader’s toolbox is Average True Range, invented by Welles Wilder, and found prominently near the top of every major charting package that can be found on the web. Its power is what makes it so popular. I always recommend to traders that they use ATR for […]
Profitable ETF Trading Strategies: Respect Volatility, use its power for good
At the most fundamental level, volatility is the fluctuation in the price of an asset. The greter the price swings in the shorter periods of time, the greater the volatility. Periods of great volatility are like thunderstorms. They get your attention. Volatility is an absolute requirement for a trader to make money. Most investors look […]