Frequent exits due to stress occur when traders stop out at a stop loss level, close the trade into high volume spikes, or attain predefined targets. All trades should have a stop loss in place. Some traders hold a mental stop while others place physical stops. Traders stay with the market as long as a [...]
Category Archives: Strategies
Back testing and Data Mining
June 25, 2009 – 1:06 pm
Backtesting and Data Mining are techniques that are influential and worthy if we use them in the approved manner, however traders often exploit them. Therefore, we’ll also explore two common pitfalls of these techniques, known as the multiple hypothesis problem and overfitting and how to overcome these pitfalls. Backtesting is just the procedure of using [...]
Gap Trading in the morning
June 24, 2009 – 9:06 am
The Art of Trading the Morning Gap Open trade is a fantastic opportunity for the smart trader who knows how to identify supply and demand. Most of the time, our entry is within seconds to minutes of the opening bell. Prices gap up because there are more buy orders at the open morning than there [...]
Portfolio Diversification
June 23, 2009 – 11:30 pm
Many investors go to snooze each night feeling protected and sheltered because their asset portfolios are properly diversified. Conventional diversification challenges to reduce jeopardy and offer more opening for the average investor. However, when we observe conventional diversification protocol through the objective eyes of pure supply and demand, it becomes quite clear that conventional diversification [...]
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